• Mon. May 20th, 2024

How financial services can fortify digital banking with identity security

When many of us picture a ‘bank robbing’ swindler, often the first image that comes to mind is one of a masked man in stripey clothes accompanied by a bag of overflowing cash. However, the days of masked crooks stealing the limelight are long behind us. 

In today’s digital era, modern criminals hide behind the masks of their computer screens and go undetected, often by duping or impersonating others. Money is still the prize possession but sensitive data is also seen as an opportunity for huge financial
gain. 

This comes as over 9 in 10 (93%) financial service firms have faced an identity-related breach in the last two years, according to our

State of Identity Security report
. Ransomware and malware attacks are the most common (at 43%), while breaches across the board are becoming more frequent – almost three quarters (72%) of all organisations surveyed highlighted that the number of breaches
has increased in the same time frame. 

With the Bank of England warning that cyber attacks pose the
biggest risk
to the UK’s financial system – which is estimated to be the target of

over a quarter (28%) of all UK cyber attacks
last year – it is crucial for financial institutions to focus on planning their response to spot suspicious behaviour, minimise disruption and contain fallout.

Why identity management matters

The financial sector is under constant scrutiny to ensure the highest standards of security and compliance, as breaches can lead to severe repercussions. Given the high stakes involved, banks and credit unions are inherently risk-averse and subject to strict
regulatory frameworks. The rapid evolution of digital banking – where banking is no longer contained to the four walls of the building – is driven by mobile technology, blockchain, and Banking-as-a-Service (BaaS). This has increased cyber threats, compliance
requirements, and the need to address security gaps.

To complicate matters, the financial sector faces challenges such as high rates of insider data breaches, complex corporate structures, and reliance on manual processes for tracking data access and user identities, making it vulnerable to inaccuracies and
inconsistencies. 

Financial institutions must look towards adopting a proactive approach in managing risks associated with handling sensitive data, while continuously monitoring and assessing their security posture, leveraging advanced cybersecurity solutions, and fostering
a culture of security awareness among their employees. Through utilising artificial intelligence (AI) technologies, financial institutions can ensure identity security can be upheld while mitigating the risk of devastating breaches and ensuring compliance
with regulatory requirements.

Identity security as a frontline defence 

With cyber criminals becoming smarter in their tactics, using the transition to the digital world to their advantage, the financial services sector needs to stay one step ahead – the key to doing this lies in a strong AI-based identity security strategy.
Encouragingly, financial institutions understand the importance of this. According to our

State of Identity Security report
, 100% of all surveyed finance IT and IT security decision makers say that identity security is either a relatively important, critical, or the number one investment priority for their organisation, with over half (56%)
having fully implemented a programme that has been in place for less than two years and less than a third (29%) having fully implemented a programme that has been in place for more than two years. 

Despite many financial sector organisations being ahead of the game when it comes to AI-powered identity security, there is still progress to be made – with 91% of financial services businesses suggesting that they have experienced challenges when it comes
to adopting identity security. Some of the most frequently cited difficulties include integration flexibility (38%), high configurability (35%), and complex implementation (32%).

AI-enabled identity security is vital in allowing organisations to see, manage, control, and secure all variations of identity – employee, non-employee, bot or machine. AI-enabled tools are also crucial in helping organisations to know who has access to
what, and why across their entire network – detangling the sometimes-messy web of access management.

Financial organisations also need to be aware of the internal, insider threats that may not be at the hands of data seeking cyber criminals and could be due to an innocent employee mistake. In today’s modern enterprise, nearly half of workforces comprise
a variety of non-employee, third party identities – meaning different individuals, all with different access requirements, are tapping in and out of networks, often unchecked. Without proper visibility and protection in place, organisations are leaving themselves
vulnerable in the face of attack.

AI-based identity security provides organisations with clear oversight into who is entering their internal systems, helping them to spot unusual patterns or behaviours well ahead of a breach occurring. This oversight helps organisations to detect and remediate
risky identity access and respond to potential threats in real-time.

Laying the groundwork for the future protection 

As banks and other financial services continue to ramp up their digitisation efforts, they must in turn invest in their cyber defences to keep up with the evolving threat landscape, ensuring they are ready to adapt to changing market demands and maintain
the highest levels of security and compliance.

The growing complexity of digital banking and the increasing volume of cyber threats require skilled professionals who can manage and protect sensitive data effectively. However, financial institutions often struggle to find and retain qualified cybersecurity
and identity management experts. By implementing comprehensive identity security solutions, banks and credit unions can automate complex tasks, reducing the need for specialised personnel, and enable existing staff to focus on more strategic initiatives. This,
in turn, can help financial organisations to efficiently allocate resources and maintain a strong security framework.

Ensuring proper separation of duties (SoD) is critical for preventing fraud and maintaining compliance with regulatory requirements. However, managing SoD policies can be challenging due to the complexity of financial institutions’ organisational structures
and the need to coordinate access controls across multiple systems. Identity management solutions can help streamline the management of SoD policies by automating access controls, monitoring user activities, and providing real-time visibility into potential
conflicts. This allows financial institutions to effectively enforce SoD policies, reduce the risk of unauthorised access or fraud, and eliminate compliance gaps. 

The importance of identity security in the financial sector cannot be overlooked. As we move further into the digital age, identity security will be the key to futureproofing and protecting banking organisations from cybercrime. By leveraging AI-enabled
identity security, organisations can have complete visibility over who is entering their internal systems, managing access to those systems whilst ensuring the protection of sensitive data. This is a necessity if businesses wish to fully protect themselves
from the malicious cyber criminals of the digital age.

 

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