Cybersecurity considerations 2024: Financial services sector

Navigating diverse regulatory landscapes – Balancing compliance in a constantly evolving cyber and privacy regulatory space is a significant objective for multinational FS companies, especially when these rules may vary significantly across jurisdictions.

Adapting to national interests and information sovereignty – National interests have inspired diverse regulatory requirements over data sovereignty, complicating global service delivery. Maintaining global accessibility and local compliance calls for substantial investments in local infrastructure and extensive operational modifications.

Supply chain security compliance – With supply chains stretching across continents, vulnerabilities have multiplied due to differing cyber controls and transparency requirements. Ensuring security and compliance for every entity involved necessitates rigorous vetting and oversight, which can escalating complexity and costs.

Incident reporting in a global context – The disparate incident reporting requirements across jurisdictions require flexible and efficient reporting mechanisms that can incorporate evolving cybersecurity mandates while ensuring prompt, accurate disclosures.

Privacy regulations compliance – In addition to navigating the SEC’s new cybersecurity disclosure rules and the Digital Operational Resilience Act (DORA) in the EU, the FS sector is grappling to implement privacy controls that are both globally consistent and locally adaptable to comply with global privacy laws such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the US. Striking a balance between customer data protection and operational flexibility remains a key challenge.

Building a resilient regulatory compliance framework – Navigating cross-border intricacies demands a sophisticated and agile approach to regulatory compliance, one that can swiftly adapt to new regulations while enhancing operational resilience on a global scale.

Enhancing data sovereignty measures – Investing in local data centers and cloud technologies with regional data storage options can help FS companies adapt to local regulations and efficiently meet data sovereignty requirements across different jurisdictions.

Strengthening supply chain security – FS companies can bolster their operational backbone against cyber threats and regulatory shifts by implementing robust security vetting and continuous monitoring processes within their supply chains.

Leveraging technology for compliance automation – Breakthrough technologies such as AI and blockchain can enable the sector to automate tedious compliance tasks, lower human error risks, and boost efficiency in incident reporting and privacy management.

Establishing global privacy standards – FS institutions can gain their advantage by spearheading the development and implementation of high global data privacy standards. This should not only foster a culture of security and customer trust, but also establish a benchmark for the entire ecosystem.

Resource limitation and data overload – The FS industry faces the dual challenge of rapidly escalating cyber threats and a critical shortage of skilled cybersecurity professionals. This scarcity compounds the difficulty of managing, detecting and responding to threats while handling vast amounts of data. As a result, security operation centers (SOCs) are strained by the sheer volume of alerts to be analysed and monitored.

Volume of vulnerabilities – The rapid evolution of technologies and discovery of software flaws leave FS firms with vulnerabilities, making prioritisation and patching a daunting task. As mature organisations work on establishing robust response programs, capacity constraints impede effective, timely remediation.

Asset inventory maintenance – A mature asset management inventory has become a prerequisite for many cybersecurity processes, ensuring coverage of capabilities, asset ownership, and resource criticality. FS institutions often grapple with outdated or incomplete asset data that hinders effectiveness of risk and security processes.

Timely incident mitigation – The rising number of alerts and complex cross-platform interdependencies is contributing to delays in mitigating cyber incidents. SOCs grapple with this workload, causing delays in assessing and addressing each incident, potentially aggravating the impact of breaches.

Machine-learning-enabled vulnerability management – FS organisations are encouraged to revamp their vulnerability management programs to eliminate bottlenecks comprehensively. Automation can help prioritise, assign, and remediate high- and lower-criticality vulnerabilities using policy-as-code solutions.

Automated asset management workflows – Enhanced automated discovery processes can more effectively validate asset metadata and ownership, providing continuous, real-time asset inventory updates and ensuring accurate application of security protocols.

Proactive incident response controls – Organisations should emphasise proactive controls to automatically block and respond to potential network threats. Implementing advanced automated containment and blocking measures can curtail the spread of malicious activity, thereby minimising the impact of security incidents.

Automated traditional Level 1 analyst triage – Leverage machine learning (ML) to correlate events across multiple sources of telemetry to reduce false positives and escalate important matters more quickly to Level 2 analysts.

Customer identity and access management (CIAM) strategies – As digital banking and financial services grow, so does the need for robust CIAM solutions that not only support seamless customer experiences but also protect customer identities and bolster trust.

Fraud detection and prevention – The FS sector is continuously challenged by sophisticated fraud schemes. This increasingly accelerates the need for identity analytics and behavior analysis to identify anomalous access patterns and transactions.

Regulatory compliance and identity management (IM) – Subject to rigorous regulatory requirements, including know your customer (KYC), anti-money laundering (AML), and privacy (e.g., GDPR, CCPA), many financial institutions are struggling to manage digital identities while ensuring compliance.

Entitlement sprawl and management – FS consumers and employees interact with various digital platforms, leading to entitlement sprawl and increased security vulnerabilities. Managing access rights becomes complex and error-prone, making the sector a prime target for identity theft and fraud.

Identity-focused attack surface management – The lack of a standardised authentication approach across FS institutions complicates the user experience and security protocols. Diverse methods lead to confusion, weaker security measures, and increased cyber risks.

The rise of deepfakes – The ease with which bad actors can alter content threatens businesses in virtually every industry and sector. Public and private organisations worldwide must maintain the appropriate computing power, forensic algorithms, audit processes, and talent to combat this threat.

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, leading to increased engagement and loyalty.

Security monitoring – Financial institutions can leverage identity analytics to detect fraud and protect customers and assets. This proactive approach can serve as a key differentiator in the market, attracting customers who prioritise data privacy. Beyond fraud, it is critical to tie privileged access, insider threat and non-human identities to the traditional security incident response processes through extended detection and response (XDR).

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.

Automated entitlement management – Streamlining and automating entitlement management can help to enhances operational efficiency, reduces human error, and can mitigate insider threats. FS institutions can leverage advanced identity governance and administration (IGA) tech solutions to provide a secure, compliant, and user-friendly access management experience.

Unified identity – Adopting broad-ranging IM tech solutions and collaborating on industry-wide standards for authentication can strengthen how the sector defends against cyber threats and drives innovation.