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Top cybersecurity trends making an impact in the financial services industry in 2016
Wed 27 January 2016 - 12:30 pmExpert | Industry | Industry Finance | Information Technology | Security | Tech
During 2015, a number of financial institutions across the world continued to be targets for cybercriminals looking to maximise their efforts. In fact, the impact of some high-profile attacks on financial institutions in the United States have been valued at over US$100 million. This has done nothing to increase confidence within the industry, as cybersecurity is rapidly becoming a complex and long-term issue that threatens the fabric of our day-to-day digital lifestyle.
This is also a very real issue in Asia-Pacific, which may be unsurprising when we realise that the region is home to robust financial markets, representing trillions of dollars across both developed and emerging economies. As cyberattacks become more sophisticated, in line with new and emerging technologies, we are seeing cybercriminals moving to target the sectors where their efforts are likely to yield the most profitable results, and ‘finance’ tops the list.
“So what does this mean for the financial sector in Asia-Pacific in the next year”, is the question that we are hearing from everyone in the financial food chain, from customers, to investors and bankers, all the way to boards of directors.
With this in mind, we have provided a look at what 2016 may hold for the financial sector in this region when it comes to cybersecurity.
1. More calls for transparency when it comes to cybercrime
Despite Asia-Pacific having the largest number of internet users in the world, unlike the US and Europe, there is no uniformity when it comes to laws mandating the disclosure of cyber breaches. This means that the incidents that actually make it into the public eye can give a distorted view of the real situation in this region when it comes to cybercrime.
While sharing less with regulators may keep the heat off organisations in the short term, there is reason to believe that this also increases the chance of additional attacks targeting similar organisations with similar techniques.
Last year this resulted in the establishment of the Cyber Threat Alliance (CTA), a group of cybersecurity solutions providers coming together to share threat intelligence on attacks taking place across the region, including motivations, tactics and information on those responsible.
We expect this trend to continue, as more organisations begin to realise the benefits of sharing knowledge as a means to unify efforts to fight cybercrime in the region.
2. The level of investment in cybersecurity solutions will accelerate
In the past year, financial institutions across Asia Pacific have continued to embrace the digital revolution, with most banks now offering some form of digital banking solution for their customers, as well as employing new backend systems to enhance operational and cost efficiencies. This trend has also put the spotlight on the responsibilities that these institutions have to protect their customers from cyber threats, working to fuel more investment in this area. Similarly, high profile cyber breaches around the world have provided a learning for all financial institutions into the potential losses that could be suffered due to insufficient security, not only monetary, but also with regards to reputation and trust. This is a point that was echoed by market intelligence rating firm Standard and Poor’s, which recently announced its decision to downgrade bank credit ratings, if they are found to have sub-par security standards, even if they haven’t been hacked.
3. International regulations on cybersecurity will serve as a model for governments to evaluate and adopt.
Cybersecurity is a global issue, however regulations to safeguard businesses and consumers are still evolving across the world. It’s unsurprising that the US is taking the lead on this front, given the high number of high profile attacks reported to have targeted US firms in recent years. This has resulted in cybersecurity becoming a focus for policy, most recently seeing the introduction of The Cybersecurity Information Sharing Act (CISA), which aims to help US companies to work with the US government to combat hackers. Similarly, the European Union has also laid out 14 actions to improve cybersecurity readiness, along with a policy on Critical Information Infrastructure Protection (CIIP), which aims to strengthen the security and resilience of vital ICT infrastructure by supporting high level of preparedness, security and resilience capabilities, at a national and EU level.
While the debate continues on how effective these regulations will be mean that governments should look to foster the sharing of cyber threat information and ensure that there are responsible privacy protections in place, for the purpose of identifying, preventing, mitigating and responding to cyber threats, vulnerabilities, and malicious campaigns. The faster organisations can share this information, the better we can serve to protect each other and push the cost back to the attackers.
4. A more holistic approach to cybersecurity will be required
As technology continues to evolve and be embraced across the region, including the introduction of electronic wireless payment systems and the adoption of Internet of Things (IoT) enabled devices, new vulnerabilities or ‘ways into the network’ will be created, giving hackers more opportunities to carry out targeted attacks. The point solution approach adopted by many companies will simply not be enough to combat these attacks, and instead calls for companies to take a more holistic approach to security; enterprises, governments and service providers have to re-architect their systems and networks off of legacy platforms and onto next generation technology to cover all bases, which include the network, endpoint and the cloud.
5. Boom in use of big data for cybersecurity insight
Big data continues to be a buzz word, as more enterprises realise the power of correlating huge amounts of data to quickly gain insight that may otherwise be impossible via traditional methods. This is particularly true when it comes to cybersecurity, with big data analytics making it possible for enterprises to analyse large amounts of complex data coming from multiple sources, in order to provide clarity on the scale, frequency and kinds of attacks taking place on the network. This trend is still emerging in the region however, Gartner expects more than 25 per cent of global firms to have adopted big analytics for at least one security and fraud detection use case by 2016.
6. Third party risk no longer an afterthought
If high profile breaches in the region have taught us anything, it’s that cyber threats resulting from lax security policies around third parties should not be overlooked. Frequent instances of compromised client data due to lapses in vendors’ security serves as a strong reminder that cybercriminals in this region are active and determined to exploit loop holes. It’s no longer just about banks, but also about their vendors, subcontractors and suppliers who have access to the data. More regulators are likewise beginning to take a closer look into how banks are managing risk when it comes to taking on third party vendors, and as more enterprises in the region make the move to invest in more resilient platform-based security platforms, we expect this trend to continue, as more enterprises move towards stricter security postures, which offer full prevention against attacks.
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