4 Ways Technology Has Changed The Financial Services Sector by Joanna Mastrocola, Conjur Blog
The emergence of new technologies has most certainly had an effect on business. For many industries, new technology has drastically changed enterprise operation and structure. The financial services industry has been largely affected by the digital age. Although new technologies and the shift toward the cloud has made things easier, and has allowed these companies to operate on a scale that is otherwise unattainable, the shift does come with its own set of issues.
Ways Technology Has Changed The Financial Services Sector
Here are 4 Ways Technology has Shaped the Financial Services Sector.
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- Virtual, Not Physical, Data
Years ago, banks were concerned with securing their physical data… guarding servers and tangible files filled with personal and sensitive data. This worry has shifted, as data is largely virtual. Of course, management at individual branches is worried about the occasional break in. But enterprises as a whole are more concerned about large scale attacks, as the dollar amount of a cyberattack on the entire institution is potentially devastating. Automation has changed almost every aspect of financial services. Banks have computerized tellers, digital records, electronic payments, etc. and all of this data can be sent across the world with the click of a button. Banks store and have access to a plethora of personal information- not only do they deal with people’s money, but they also hold onto a great deal of sensitive, identifiable information- so when a financial enterprise is hacked, a lot more than money is at stake.
- It’s Gone Global
Technology has changed the industry completely and has introduced some new key players. Now, banks can operate across the world, the cloud making it possible to share information anywhere and everywhere. In recent years, new financial hubs have emerged, as business can now be conducted globally. As more players enter the space, there is an increase in the size of infrastructures and IT teams, an increase in the amount of data that is shared, and an increase in the surface area that is vulnerable to attacks.
- Security is Everyone’s Problem
Security has become an enterprise wide concern- Years ago, the only people truly worried about security were the people who worked in the server room. Things are different now. As the vast amount of data the financial services industry stores is highly sensitive, and can be easily shared internally and accessed by hackers, security needs to prevalent in every single aspect of the business. Now, financial service sector is concerned with both insider and outsider threats. As hackers have become increasingly more stealthy and resourceful, enterprises must make sure their security is robust enough to thwart their efforts.
- The Internal Hierarchy has Shifted
The IT team has become just as important as financial experts in the financial services industry. This is especially true as more and more companies make the transition to the cloud. These enterprises need large IT teams to manage data and keep up with current trends. The digitization of the industry means that enterprises are able to move fast, innovate, and create new and exciting features. Having large, agile IT teams is crucial to a financial institution’s success in this new, more competitive marketplace.
Hackers have become smarter and more determined and if enterprises don’t take security seriously, they are at risk of a breach. The financial services industry has a lot more at stake than other types of businesses. Unlike retailers, a bank’s main job is to hold our most personal information and keep it safe. Thus, a breach would be devastating in this industry, as consumer trust would likely decline drastically if their sensitive financial information was compromised. Keep in mind, we aren’t just talking about individuals who utilize these finance firms, but also large corporations. Losing these customers due to a cybersecurity issue would be overwhelming.
These four changes reveal how important infrastructure security has become for financial services. Although the cloud has allowed these corporations to operate on a much larger scale, and these new capabilities have brought an increase in revenue, it does come with a price. Although enterprises can handle more data, they need to be able to effectively secure it and avoid the public nightmare that is a data breach.