A viewpoint by Clément T., Manager, and Nathan M., Manager at Amaris Consulting
financial security
From wealth management and insurance to investments and digital banking, the financial services industry plays a crucial role in countries’ economies. Interconnected with other sectors, this industry not only supports economic growth but also provides stability.
The digital revolution has undeniably reshaped the way businesses operate and interact with customers. In the financial services industry, this transformation has manifested in various ways, including the automation of processes, the reduction of manual intervention, the expansion of remote services, and the creation of more customer-centric experiences. However, it is at this intersection of innovation and efficiency where security concerns arise. While digital transformation offers a unique level of efficiency compared to traditional systems, it also introduces risks to financial security and privacy.
A playing field for cybercriminals
As technology continues to advance and offer numerous advantages to organizations, it also expands the environment in which cybercriminals operate. In the third quarter of 2023 cyberattacks doubled compared to the same period the previous year. Therefore, it comes as no surprise that the financial services industry has been ranked 2nd in global cyber incident damage statistics, with losses averaging around $5.9 million per incident.
Contrary to common assumptions, attacks with the objective of directly stealing money from financial organizations are actually rare occurrences. Instead, the most prevalent types of cybercrimes involve the disruption of business processes and data breaches. Hackers capitalize on these leaks by monetizing the stolen information. Subsequently, they use the obtained information to target customers of financial entities.
The counterattack
In the fight against digital attacks, financial institutions deploy several defenses such as internal software solutions with advanced algorithms and private cloud systems. Each approach offers a distinct set of capabilities and advantages, providing a layered defense strategy to safeguard sensitive data and preserve customer trust.
- Software solutions with advanced algorithms: Proprietary software solutions equipped with advanced algorithms are proving to be indispensable assets for financial institutions. These solutions serve as digital guardians, constantly monitoring transactions and detecting anomalies.
These programs have sophisticated built-in algorithms designed to operate in real- time, analyzing transaction data streams with speed and precision. What sets these software solutions apart is their ability to adapt and customize their algorithms to suit the unique needs and challenges faced by each organization, ensuring maximum effectiveness.
Moreover, these solutions not only allow companies to detect fraud attempts, but also provide valuable insights derived from extensive data analysis. By considering factors such as transaction types, user behaviors, and specific fraud patterns, proprietary software offers actionable insights that enable informed decision-making and strategic planning. As a result, financial institutions are armed with the knowledge and tools necessary to stay one step ahead of criminals.
- Private cloud systems: As data stands as the cornerstone of operations in the financial services industry, it must navigate through networks and systems with utmost confidentiality. Private cloud security uses advanced encryption protocols to control access. Think of them as layers of armor that protect the data from unauthorized access. By encrypting data both when it is stored and when it is sent, you create a secure pathway for information exchange, ensuring it stays safe from cyber threats.
Furthermore, private cloud systems are equipped with the latest firewalls and detection systems. These systems are constantly monitoring the flow of data to and from internal operations. If any suspicious activity is detected, they spring into action, stopping any potential threats.
Collective resilience
In response to the growing challenges posed by cyber threats, financial entities collaborate through consortia and forums to foster an environment of information sharing.
This collaborative spirit transcends competitive boundaries and unites organizations around the common goal of ensuring the trust and stability of the financial system. By sharing information and developing joint security strategies, they build a robust defense against emerging threats.
In essence, this alliance between advanced technology and collaborative effort is a testament to the industry’s ongoing commitment to security and trust. As financial entities continue to undergo the complexities of the digital landscape, the integration of advanced algorithms and private cloud services remains a vital asset to ensure the security and reliability of institutions around the world.
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