Though the ripples are gentler than they once were, the wake of the 2008 financial crisis is still felt today. Financial regulators around the world have since adopted laws that increase transparency and scrutiny alike, making it difficult for traditional banks to operate as opaquely they once did. This has opened the market wide for tech-assisted financial services that people like to refer to as fintech.
It’s a mistake to assume that fintech innovations come from independent programmers or garage development shops, though it has lowered the barriers to entry for providing financial services. Almost all of the world’s biggest banks and institutions invest heavily in fintech for their own products in order to stay competitive, and accordingly the market is enormous, estimated to claim upwards of $4.7 trillion of the sector’s total revenue.
However, opening a market may also mean exposing something within it, and alongside a rash of serious breaches in the last decade, fintech’s pace of innovation is now threatened by its inability to be a trustworthy custodian of customer data.
Technology Both a Catalyst and a Cure
The fintech sector is responsible for many new ideas, some of them the same types of products and investment instruments we already have, like loans, but improved. Others, like crowdfunding, robo-advisors, and mobile payments are new and could have only existed with the addition of technology. An online lender that uses an algorithm to match someone’s credit profile with applicable lenders, do a credit check, and approve the loan within 24 hours is a good example.
Despite convenience, a series of serious data breaches in the sector have customers thinking more about how complex fintech services like this handle their data, and regulators’ ears have perked up as well. Credit and identification details must be entered into an online database, trade hands, and be processed and sometimes stored and shared externally. It may result in an approval a hundred times faster than going into the bank, meeting with a loan agent and filling out forms, but it comes with risks that customers shouldn’t be forced to consider.
Even after GDPR laws went into effect, cyber attacks on EU companies increased to a rate of one attack every five minutes, and these days the bigger the company the harder they fall, with damage that’s both hurtful to their brand and to the bottom line. For organizations in the sector, innovation and the intricacy of data structures has resulted in growth, even if customer trust lags behind. Regulations like GDPR and MiFID II are pushing against this notion, just in time for technology like Zero Trust security to provide an answer: remove trust from the equation altogether.
Zero Trust: Few Can Step Into the Vault
What’s so safe about a brick and mortar bank? Cameras are there to watch all entrants and occupants at all times. The money is tucked away behind layers of security and many walls and floors. Only a few employees have access to the vault – where the customers’ most sensitive possessions are – and there are alarms everywhere. How can online financial services providers redeem this level of security?
At a time when hackers are more clever than ever and regulations are boosting enforcement, Zero trust security solutions represent a redemption. In terms of product, Zero Trust is a platform integrated across financial service providers’ networks to enable a superior level of protection for all the data their employees even get close to touching. It accomplishes this by giving IT control over which employees have access to certain parts of the network, and gain oversight over who enters it and what they do.
Using Zero Trust solutions, finance companies and banks can regain the confidence of the market, move faster towards growth and tech initiatives, and take a zero-tolerance approach to compliance, ending an era where data breaches are the new normal. There are three ways it can do so:
With segmented policy access: Don’t give every employee the key to the bank vault. This makes each employee as big a risk as the last, no matter their personal security hygiene. For a platform that helps someone do their taxes and submit the correct forms, an accelerated personal lender, or even a regular online bank, Zero Trust creates specific user access policies at the individual application and even file level, rather than providing full data access to any employee with a password.
Employees of financial institutions only have access to the least amount of sensitive resources required to do their jobs, and no more. This significantly reduces the number of relevant targets for hackers, and lessens the impact of employees with poor security habits. Access is often synonymous with speed, however, and so banks with staff who wear multiple hats – a necessity in this era of customer convenience – can rely on other aspects of Zero Trust.
By monitoring the network: The equivalent of cameras to watch and record all corners of the bank, activity monitoring features are a central aspect of Zero Trust and run constantly when users are connected to the network. Suspicious activity is more visible to IT, which can then prioritize the threat and close the gap if necessary. Zero Trust also means zero tolerance, after all, so having proof of what occurred on the network in black and white is necessary for ideas that are crucial for financial services companies, such as compliance reporting. A central management dashboard reduces the manpower requirements of monitoring and also can funnel data to other processing tools that look for deeper insights.
By securing network access: Though resources like files and applications can be segmented with the least-privilege principles of Zero Trust, it still benefits security to install multiple layers of identification and protection at the edge of the network. Encrypted IPSec tunnels, provided by a standard enterprise VPN or business VPN, stretches across the network and cloud and requires employees to first connect through an application before being allowed inside. This also offers the chance to integrate other network-wide features such as automatic Wi-Fi protection (which cuts the internet off should the VPN connection fail), multi-factor authentication for extra device-based security, and web filtering tools that limit what network-connected devices can access on the internet.
Trust is an Achilles Heel
With these tools, IT teams at banks and fintech companies can safely abandon the defenses they used to post at the network perimeter. Zero Trust lets them build a more agile, aggressive security apparatus which refocuses on users and employees instead. That’s an important milestone when the reality of financial breaches is that it’s often sloppiness or negligence that exposes customer data, not an intrepid hacker genius. For Equifax and JP Morgan, failure to patch and install 2-factor authentication on crucial servers, respectively, caused irreparable breaches of customer data and industry damage.
Hackers search endlessly in repetitive fashion across employees, devices, and systems for these kinds of human errors, and so an idea like Zero Trust not only makes gaps less common, but also reduces their impact and improves accountability. It’s the type of safety net that helps organizations like healthcare providers and financial service providers and meet compliance expectations confidently, and meet the pace of innovation they’ve so far set for themselves without looking back.