# Securing digital transformation in the financial services sector
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-03-02
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Challenges and Solutions in Financial Services Cybersecurity
Meta Description: Discover the operational challenges facing IT and security teams in the financial sector. Learn about the risks, solutions, and regulations impacting banks
URL: https://financedigest.com/securing-digital-transformation-in-the-financial-services-sectorhtml

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_By **Brian McCann,** President of Security Solutions,_ [_Neustar_](https://www.home.neustar/security-solutions)

The operational challenges facing IT and security teams in the financial services sector are immense. Established market leaders are up against growing competition from a new breed of FinTech players, forcing them to find ways of remaining relevant in an increasingly digital arena.

This has resulted in many financial services institutions operating a unique combination of legacy infrastructure alongside modern, cloud-based and mobile technologies. However, as organisations across the sector continue to implement new [digital transformation](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications ") strategies and tactics – putting them ahead of companies in other industries – they are also exposing themselves to greater security risks.

While cybersecurity has always been a key focus for the [financial services sector](https://www.financedigest.com/iot-for-the-financial-sector.html "IoT for the Financial Sector"), tackling these risks requires banks to implement security measures that will meet the demands of the new environment in which they operate.

### **Complicated situation**

Today’s consumers want omnichannel [digital experiences that will support them across their physical and their virtual interactions – from branch to web to app – and it is this that’s driving continued investment in digital transformation initiatives across the financial services](https://www.financedigest.com/the-future-for-financial-services-is-digital-engagement.html "The future for financial services is digital engagement") sector. The [COVID-19 pandemic](https://www.financedigest.com/uk-sees-biggest-rise-in-foreign-workers-since-covid-19-pandemic.html "UK sees biggest rise in foreign workers since COVID-19 pandemic") has only hastened this trend, with lockdown measures and social distancing driving people increasingly online, away from traditional brick and mortar banking environments.

Yet, as banks accelerate their [digital transformation](https://www.financedigest.com/world-class-finance-digital-transformation-and-analytics-based-decision-making-among-key-imperatives-for-creating-finance-agility.html "World-Class Finance: Digital Transformation and Analytics-Based Decision Making Among Key Imperatives for Creating Finance Agility") strategies, the pace of software delivery and the migration to the cloud, they are also facing the risk of attack by bad actors. Last year alone, for example, [almost two-thirds of large financial services companies](https://www.prnewswire.com/news-releases/helpsystems-research-reveals-almost-two-thirds-of-financial-services-firms-have-suffered-a-cyber-attack-in-the-last-12-months-301166477.html) admitted to being hit by a cyber-attack, with many experiencing a surge in attacks since the start of the pandemic. As one of the most targeted industries, criminals frequently [launch attacks on banks’ fast-growing app](https://www.financedigest.com/how-an-injury-led-to-launching-a-first-of-its-kind-fitness-app.html "How An Injury Led to Launching a First-Of-Its-Kind Fitness App") portfolios and front-end infrastructure with everything from distributed-denial-of-service (DDoS) attacks to more advanced threats such as crypto-mining, zero-day attacks and ransomware. Indeed, such is the level of threat, the [FBI issued a warning](https://www.ic3.gov/Media/Y2020/PSA200610) in June 2020, highlighting the complex security risks faced by banks – particularly in defending their mobile banking customers.

And, as if protecting an organisation and its [customers while balancing legacy and cutting-edge infrastructure wasn’t difficult enough, the situation is further complicated by the need to comply with regulations such as the GDPR – especially when those customers are expecting a flawless omnichannel](https://www.financedigest.com/how-omnichannel-cx-can-help-insurers-meet-customer-expectations.html "How omnichannel CX can help insurers meet customer expectations") experience.

### **Intelligent solutions**

![Brian McCann](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/brian-mccann-450x450-1736838549831-compressed.jpg)

Brian McCann

[Protecting a bank’s infrastructure and its customers requires](https://www.financedigest.com/fraud-protection-why-customer-onboarding-requires-digital-identity-processing.html "Fraud Protection: Why Customer Onboarding Requires Digital Identity Processing") the deployment of multi-layered solutions driven, like so much else in business today, by data.

IP intelligence, for instance, is gleaned from data on the IP addresses of inbound traffic, and can enable [financial institutions to control and distribute traffic to apps securely](https://www.financedigest.com/post-brexit-uk-workers-can-have-financial-security.html "Post Brexit – UK workers CAN have financial security") and intelligently. Turning this [intelligence into geolocation and risk insights makes it possible for a bank’s security](https://www.financedigest.com/the-future-of-artificial-intelligence-in-cyber-security.html "The Future of Artificial Intelligence in Cyber Security") team to understand the level of risk associated with an IP address as it attempts to gain access to the network, including where the traffic – and any possible attack – is coming from.

These insights [enable banks](https://www.financedigest.com/the-open-banking-revolution-enabling-accessible-and-inclusive-finance.html "The open banking revolution – enabling accessible and inclusive finance") to make informed decisions about the trustworthiness of network connections. Armed with the ability to pinpoint any potential threats to the infrastructure, [security teams can prevent them from ever](https://www.financedigest.com/london-police-say-queens-funeral-poses-biggest-ever-security-test.html "London police say queen’s funeral poses biggest ever security test") becoming an issue. Conversely, genuine [customers can be identified in real time](https://www.financedigest.com/how-real-time-data-innovation-is-driving-up-customer-experience-in-fintech.html "How real-time data innovation is driving up customer experience in fintech"), while access is denied to traffic from risky or unknown IP addresses, stopping bot activity in its tracks. Not only that, IP geolocation intelligence is critical for financial [firms](https://www.financedigest.com/how-finance-firms-can-unify-two-data-approaches-to-improve-both-compliance-and-security.html "How finance firms can unify two data approaches to improve both compliance and security") bound by regulatory mandates which prohibit access from users in high-risk regions or countries.

In addition to protecting a bank’s infrastructure from malicious traffic, IP geolocation intelligence can also help [improve the experience it offers its customers](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments"). Imagine that every [customer walking into a high street bank](https://www.financedigest.com/why-banks-need-to-embrace-ai-first-customer-service.html "Why Banks Need to Embrace AI-First Customer Service") wore a label indicating their home postcode, which had been verified before entry. Local customers could be served more quickly with confidence, remote customers could be served with fast, extra [identity verification](https://www.financedigest.com/how-digital-identity-verification-will-revolutionize-security-defenses-in-the-financial-services-industry.html "How Digital Identity Verification Will Revolutionize Security Defenses in the Financial Services Industry") steps, and those with indiscriminate or suspicious postcodes would be redirected to a specialised handling area.

The [benefits of IP intelligence are clear](https://www.financedigest.com/clearing-out-your-garage-benefiting-from-corporate-simplification-2.html "Clearing Out Your Garage – Benefiting from Corporate Simplification "). However, it is far more effective when integrated across the full breadth of the security stack, informing and augmenting everything from security information and event management (SIEM) and intrusion [detection system](https://www.financedigest.com/the-fall-detection-system-market-to-simulate-on-a-stupendous-note.html "The Fall Detection System Market To Simulate On A Stupendous Note") (IDS), to web application firewalls (WAF) and DDoS mitigation services.

### **Secret of success**

Increased competition and the impact of COVID-19 have accelerated digital transformation initiatives in the [financial services sector](https://www.financedigest.com/overcoming-information-overload-in-the-financial-sector.html "OVERCOMING INFORMATION OVERLOAD IN THE FINANCIAL SECTOR"). But, as [banks and their customers move progressively towards online and mobile](https://www.financedigest.com/why-you-should-use-a-mobile-banking-app-and-how-to-make-the-most-of-it.html "Why You Should Use a Mobile Banking App – and How to Make the Most of It"), the attack surface has expanded significantly. [Banks must](https://www.financedigest.com/lost-in-translation-why-banks-must-learn-the-language-of-their-customers.html "Lost in Translation: Why Banks Must Learn the Language of their Customers") protect against opportunistic threat actors exploiting vulnerabilities in customer-facing sites and apps. At the same time, though, they [must continue to offer customers the flawless experience they expect](https://www.financedigest.com/theres-a-fine-line-between-relinquishing-control-and-accountability-financial-institutions-must-balance-both-to-successfully-cloudify-operations-and-meet-customer-expectations.html "There’s a fine line between relinquishing control and accountability. Financial institutions must balance both to successfully cloudify operations and meet customer expectations").

The success – or otherwise – of their digital transformation initiatives depends on their ability to address this diverse set of challenges. By making IP intelligence a key part of their security posture, financial services [institutions](https://www.financedigest.com/top-5-security-technologies-that-every-finance-institution-workplace-should-consider.html "Top 5 Security Technologies That Every Finance Institution Workplace Should Consider") can reap the rewards of their investments with greater confidence.


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