In an article earlier this year the global business consulting firm KPMG wrote about Cyber Security Considerations for the Financial Services Sector in which the article’s authors identified several technology and macroeconomic trends affecting risks and opportunities for organizations in the financial services industry. According to the report, those trends were “testing the resilience of financial services business models and pushing sector leaders with financial services to explore innovative avenues for value creation while managing emerging cyber security risks and privacy concerns.”
Eight Priorities
Among the outside factors KPMG identified as influencing the industry were things like a changing regulatory environment, automation, and the evolution of digital identity. The article offered eight priority actions financial services firms can undertake to prepare for these changes, including:
- Develop and implement a sophisticated framework for regulatory compliance that can adapt to different, constantly evolving laws across jurisdictions.
- Align investments with local infrastructure and cloud technologies that meet data sovereignty requirements.
- Establish rigorous vetting and monitoring processes for supply chain security.
- Leverage innovative technologies like AI and blockchain to automate tedious compliance tasks.
- Implement automation for effective vulnerability management and proactive incident response.
- Strengthen CIAM strategies to elevate security and customer experience.
- Incorporate identity analytics for advanced fraud detection and prevention.
- Advocate for standardized authentication practices across the industry.
Some of these actions (we bolded them for emphasis) can be tackled or supported with the adoption of a capable managed file transfer solution. With a good MFT solution rules and automations can be established that ensure data is protected and moved to the correct destinations to support compliance programs. And by standardizing data transfers with trading partners using a secure MFT platform you can easily improve the security of your digital supply chain. In fact, earlier this year we wrote of how, following a spate of cyberattacks that compromised other MFT platforms, several of our customers decided to standardize their digital supply chains on Diplomat MFT to ensure PGP encryption and SFTP transport security.
Standards and Automations
We observed at the time that large financial institutions like CitiBank, JP Morgan, and Bank of America require that firms exchanging data with them standardize on SFTP for encrypted transport at the very least. (We recommend automating the files themselves using PGP to ensure data integrity and security throughout the entire file transfer process.) That kind of leadership makes a difference because when large firms set such rules as a condition for doing business with them, “Organizations that don’t want to lose access to these important financial bellwethers are compelled to play by the rules or lose business.”
That plays into the importance of leveraging innovative technologies to “automate tedious compliance tasks” like manual file transfers and process audits. Regulatory compliance programs require auditability, so automating process data capture makes that a breeze and provides proof that rules have been followed. As for day-to-day tasks, staff have better things to do than to babysit file transfers, after all. And when those transfers are accomplished manually, you not only waste valuable time and undermine staff productivity, but you introduce the risk of human error, which plays a factor in nearly 90% of all data breaches. Human beings are wonderful creatures, but they are known for making mistakes like sending data to the wrong place or forgetting to encrypt sensitive files. When they are sick, tired, or unfamiliar with processes because they are new or filling in for someone who is sick or tired, they make more mistakes.
Automations don’t suffer from human frailties and can be counted on to reliably perform tedious, repetitive—but necessary—tasks as programmed. And automating these file transfer tasks doesn’t require AI or blockchain. All it takes is a well-designed, secure managed file transfer solution that includes essential process automations that have been proven over time and in some of the most demanding financial services (and healthcare, manufacturing, government, retail…) environments. In fact, many financial services firms use Diplomat MFT to support their information security and data privacy compliance programs because of its secure-by-design architecture and performance in an intuitive administrative interface that requires no training to operate. When tools are easy to use and automated, they enhance productivity and security by ensuring processes are followed rather than incentivizing risky workarounds.
Reliable, Secure Solutions
KPMG states that data breaches and cyberattacks affecting financial services organizations run the risk of “the potential exposure of confidential financial information” and that such incidents “posed a serious threat to the affected organizations. This not only jeopardized the privacy and security of clients, but also exposed the organizations to legal and regulatory consequences.”
We agree and have been beating that drum for twenty years. And while we would never claim that Diplomat MFT will solve all your data security and compliance challenges, we are confident in stating that a reliable, secure-by-design MFT solution like Diplomat MFT can play an important role in a security and compliance strategy. If you’d like more information, a demonstration, or want to test Diplomat MFT in your enterprise for 15 days, get in touch with us.