Financial Crime World

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The State of Cybersecurity in Financial Services

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The current state of cybersecurity in the financial services (FS) sector is a pressing concern. With the increasing threat landscape, FS institutions face significant risks from cyber attacks, including data breaches, identity theft, and fraud. However, there are opportunities for improvement that can enhance customer experience, loyalty, and operational efficiency.

Challenges

The following challenges highlight the need for improved cybersecurity in the FS sector:

  • Identity Sprawl
    • The lack of a standardized authentication approach across FS institutions complicates security protocols.
  • Rise of Deepfakes
    • Easy alteration of content threatens businesses worldwide, requiring sophisticated computing power, forensic algorithms, and audit processes to combat this threat.
  • Cybersecurity Threats
    • Financial institutions face significant risks from cyber attacks, including data breaches, identity theft, and fraud.

Opportunities

The following opportunities highlight the potential for improvement in FS cybersecurity:

  • Improving Security and Experience
    • Implementing tools like biometric authentication, single sign-on (SSO), and multi-factor authentication (MFA) can enhance customer experience and loyalty.
  • Security Monitoring
    • Leverage identity analytics to detect fraud and protect customers and assets.
  • Regulatory-Fueled Transformation
    • Implement effective IM tech solutions that automate compliance processes and reduce regulatory risks.
  • Automated Entitlement Management
    • Streamline and automate entitlement management to enhance operational efficiency, reduce human error, and mitigate insider threats.
  • Unified Identity
    • Adopt broad-ranging IM tech solutions and collaborate on industry-wide standards for authentication.

Real-World Example

A recent cyber event highlighted the need for robust cybersecurity measures in the FS sector. Attackers exploited vulnerabilities in a key financial network to create fraudulent money transfer requests, resulting in significant financial losses.

Recommendations

Top priorities for FS security professionals include:

  • Developing and Implementing a Sophisticated Framework for Regulatory Compliance
  • Aligning Investments with Local Infrastructure and Cloud Technologies that Meet Data Sovereignty Requirements
  • Establishing Rigorous Vetting and Monitoring Processes for Supply Chain Security
  • Leveraging Innovative Technologies like AI and Blockchain to Automate Tedious Compliance Tasks

KPMG’s Role

KPMG professionals can assist financial services organizations develop advanced digital solutions, advise on the implementation and monitoring of ongoing risks, and design appropriate responses to cyber incidents.