Cybersecurity Challenges and Opportunities in Financial Services
The financial services (FS) industry faces unique cybersecurity challenges that require a comprehensive approach. This guide highlights key opportunities for improvement, emphasizing the importance of adapting to evolving global regulatory demands.
Key Challenges
Resource Limitation and Data Overload
- FS institutions face a critical shortage of skilled cybersecurity professionals, making it difficult to manage, detect, and respond to threats while handling vast amounts of data.
- This shortage is exacerbated by the need for specialized skills in areas like threat intelligence and incident response.
Volume of Vulnerabilities
- The rapid evolution of technologies and discovery of software flaws leave FS firms with vulnerabilities, making prioritization and patching a daunting task.
- This is particularly challenging due to the interconnected nature of financial systems, which can create complex attack surfaces.
Asset Inventory Management
- FS institutions need to maintain an accurate and up-to-date asset inventory to ensure effective vulnerability management and incident response.
- However, this can be difficult due to the dynamic nature of IT environments and the lack of visibility into cloud-based assets.
Supply Chain Security
- FS institutions must establish rigorous vetting and monitoring processes for supply chain security to prevent potential breaches.
- This includes ensuring that third-party vendors and partners meet adequate cybersecurity standards.
Key Opportunities
Improving Security and Experience
- Balancing convenience with security using tools like biometric authentication, single sign-on (SSO), and multi-factor authentication (MFA) can enhance the customer experience.
- This is particularly important in mobile banking and online payment systems, where security and ease of use are crucial.
Security Monitoring
- Financial institutions can leverage identity analytics to detect fraud and protect customers and assets.
- This includes using machine learning algorithms to identify patterns and anomalies that may indicate malicious activity.
Regulatory-Fueled Transformation
- Implementing effective IM tech solutions that automate compliance processes and reduce regulatory risks can build customer trust, leading to increased customer retention and attraction.
- This is particularly important in areas like anti-money laundering (AML) and know-your-customer (KYC), where regulatory requirements are complex and ever-changing.
Actionable Steps
Develop a Sophisticated Framework for Regulatory Compliance
- Implement a framework that can adapt to different laws across jurisdictions.
- This includes staying up-to-date with changing regulations and ensuring that compliance processes are aligned with business priorities.
Align Investments with Local Infrastructure and Cloud Technologies
- Ensure that investments in technology meet data sovereignty requirements.
- This includes using cloud-based services that offer adequate security and compliance features.
Establish Rigorous Vetting and Monitoring Processes for Supply Chain Security
- Implement rigorous vetting and monitoring processes for third-party vendors and partners.
- This includes ensuring that they meet adequate cybersecurity standards and are transparent about their security practices.
Leverage Innovative Technologies to Automate Compliance Tasks
- Use AI and blockchain technologies to automate tedious compliance tasks.
- This can help reduce regulatory risks and improve customer trust.
Industry Expertise
KPMG professionals are adept at applying leading thinking to financial services firms’ most pressing cybersecurity needs, developing custom strategies that align with business priorities, and implementing effective solutions that meet industry standards. By leveraging their expertise, FS institutions can stay ahead of evolving global regulatory demands and protect themselves against increasingly sophisticated cyber threats.