There are few sectors that demand the same high levels of security that the finance sector does. With technological advancements rocketing in the sector, the threat of cyber-attacks increases also.
With new technologies being introduced by fintech’s and challenger banks, traditional brick and mortar-based banks and other financial institutions are rapidly introducing the latest tech to keep up, offering customers greater ease of making payments and reviewing account information. With this however comes a need to ensure that customers feel safe and secure when banking with them.
There are a few key areas both bank and customers must consider, importantly the technologies that are being introduced and how banks and customers can protect themselves against these emerging security threats.
Many have either made the shift to a virtual bank or signed up to a virtual bank as an additional to their existing bank. The reason for this being the ease of use and speed in which virtual banks are operating. Speed has become of primary importance to the modern consumer, both in access to their money and the speed of transfers to other accounts and between existing accounts.
The financial landscape has become highly competitive, banks are in direct competition with virtual banks and fintech’s that have built their businesses from the ground up to focus purely on digital efficiency, a clear advantage is had here.
However, as new entrants enter the market, digital banking platforms rely on cloud-enabled ecosystems to operate, consequently working with several technology partners. There is a risk to this approach, as although it increases speed for customers, it opens greater complexity to cyber risk management – something that is still very much being developed.
Equally, the speed in which the financial services industry is evolving, and innovating brings additional risk. Financial institutions will need to focus on embed cybersecurity as a centre point to their service as we are likely to see an increase in security weaknesses as new technology continues to enter the market.
AI And Chatbots
Financial services are beginning to implement chatbots and AI, much like most other industries have, to achieve greater efficiency in dealing with routine tasks and common questions asked by their customers.
Revenue will no longer come from standardisation but a flexible, customisable product that is only made possible with the use of AI. Relationships will no longer be the strongest differentiator when it comes to competitive advantage, but the personalised benefits that a bank offers will help to attract and retain customers.
This is a big change up from the difficulties previously apparent when walking away from your existing bank. How AI is implemented will have to be constantly updated, it needs to go beyond the simple ‘question and answer’ we are used to, with interactions becoming far more seamless.
This brings its own challenges however, with cyber criminals using advanced methods to manipulate security weaknesses that are otherwise automated, something that AI may not be able to deal with. There is a case for AI to be governed as it advances as you would a person to help improve security.
A Volatile Environment
As mentioned previously, banks are expected to face continued vulnerabilities in their technological offerings, online banks and traditional brick and mortar banks will equally face these issues.
Organisations will begin to centralise their fraud risk and operations, and as this shift occurs it will be interesting to see what the model looks like. Technology will play a key role in developing a standard model adopted across all technologically astute financial services.
What is certain is that patterns of fraudulent activity will be detected at an even greater rate. Machine learning and bots will detect these anomalies with greater accuracy, something that is currently falling behind what many predicted at this point. Market leaders are already investing huge sums to advance this to gain further competitive advantage, keeping the industry ploughing forwards.