Surfing the wave of cybersecurity in digital banking

The wave of technological advancements and digital innovation over the past decade has rapidly transformed the BFSI industry, making financial services more efficient and easily accessible to everyone. From making purchases, payments and withdrawals, to crowdfunding, investing and applying for loans, people can now enjoy a plethora of digital banking services, all from the comfort of of their home. Recent government data witnessed India’s digital transaction boom, led primarily by UPI, which soared nearly 90% from 232,000 to over 430,000 between FY19-21, and is expected to account for nearly 71.7% of global payment volume by the end of 2025. .

As enabling and disrupting fintech is part of our way of life, this accelerated pace of digital innovation has become a lucrative avenue for cybercriminals, leading to a surge in cyberattacks. The fintech industry has seen a large proportion of fintech applications within its networks fall victim to cyber threats and attacks, revealing a new range of digital security vulnerabilities over the past two years. With the value of digital payments in India set to triple to $1 trillion by FY26 from $300 billion in FY21, it is critical that fintech companies and financial institutions protect their networks and sensitive data with adequate cybersecurity solutions. future breaches. Now the question remains: are businesses equipped to protect against ever-evolving cyber threats in 2022?

Network Security Priority

The advent of the cloud, artificial intelligence (AI) and machine learning (ML) has further enhanced the integrity of banking networks in terms of data security, transparent operations and rapid response to cyber threats. As the introduction of biometrics and network-level analytics has launched protection against fraudulent activity in the digital world, providers of fintech products and services must adopt a strategic security approach to contextualize, correlate and Accurately profile all digital entities within their network. Governments and enterprises must combine their efforts to identify exploitable cyber vulnerabilities and allocate budgets for network vulnerability management and infrastructure security intelligently and efficiently.

Take advantage of the cloud

With many fintech and financial service providers migrating to the cloud, the BFSI industry has undergone a paradigm shift from cumbersome manual processes and high operating costs to efficient and cost-effective operations and enhanced customer experiences. The combination of a zero-trust, cloud-based architecture with AI capabilities will help enterprises gain complete visibility into every step of digital interaction in a hyper-connected security infrastructure. IT teams can further leverage cloud computing combined with advanced network analytics to perform actions based on threat intelligence.

Improve fraud detection with AI

The large-scale impact of AI in the fintech space is evident, ushering in a revolution in how consumers and businesses access and manage their finances. Today, fintechs are moving towards adopting AI and ML-based solutions to effectively identify and prevent fraud and financial crimes on their networks. With cybersecurity measures being enhanced by AI, the BFSI sector in India will soon see the emergence of futuristic concepts such as ‘digital banks’ and ‘open banking’.

Bolster Endpoint Security with SASE

According to a recent study by PwC India and the Data Security Council of India (DSCI), the BFSI sector accounts for 26% of total spending in the Indian cybersecurity market with $518 million and is expected to reach $810 million by the end of the year. end of 2022. Implementing a Secure Access Service Edge (SASE) architecture over SD-WAN will enable financial service providers to seamlessly integrate cybersecurity and network access management on a single platform. single and unified form. By leveraging SASE and a connected security strategy, enterprises can effectively manage network security across all endpoints with direct and secure access to cloud applications, as well as unified visibility and policy management.

The path to follow

The rise of fintech has also introduced the concept of Buy Now Pay Later (BNPL), which has revolutionized the digital banking ecosystem in India. According to a report by RedSeer Consultancy Group, the BNPL market in India is expected to grow from $3-3.5 billion to $45-50 billion by 2026. With a sharp increase in the number of consumers using digital transactions, fintech can follow the trend of digital money and leverage blockchain to deliver innovative security features in a reliable and decentralized manner through proper adoption of regulatory technology.

As BFSI continues to grow as one of the most dominant industries, the security of the entire ecosystem against active threats to personal data accessed through mobile or desktop applications must come first. A security-centric approach should be adopted by banks, fintech companies, small banking firms and financial institutions to strengthen their security posture, act preemptively and stay ahead of evolving cyber threats.



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The opinions expressed above are those of the author.



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Michael J. Birnbaum