There’s immense pressure on businesses to transform themselves digitally or run the risk of becoming irrelevant and, eventually, obsolete. The same is undeniably true for banks and other financial institutions too, given the pace of technology adoption by customers.
But there are some formidable challenges to overcome. The existence of several monolithic legacy systems that have become central to business processes is just the first hurdle to cross. Other critical challenges include the fact that these banks are custodians of critical personal and business data that must be secured.
Clearly, technology transformation in banking is easier said than done. But in the face of calls to digitize themselves as banks embark on this path, they open themselves to a variety of vulnerabilities. Let’s look closer.
The security challenges of technology transformation
Today’s banking customers expect a high level of sophistication in the way banking services are offered – often at par with the other consumer services they experience in their personal lives. This is the key motivator for many banks to take the technology transformation plunge.
But technology transformation in banks, although essential, comes with its own set of issues and roadblocks – especially concerning security that can make them extremely vulnerable.
Here are the security challenges of technology transformation in banks:
• The banking sector is a highly regulated industry, with players having to comply with a melee of existing (and upcoming) regulations. Retiring old systems or introducing new ones requires substantial preparation and planning – from a compliance as well as a security angle.
• The pressure to quickly become digital often causes banks to focus on new features and capabilities that will bring them to match the speed of their competitors – often causing security and privacy to take a backseat.
• Migrating legacy systems with poor security features that have been customized over and over again to suit evolving business requirements make them critically incapable of meeting modern-day security requirements.
• Because banks often deal with a range of critical information such as income, job-related information, personal addresses, balance sheets, and more, they have to ensure when data is migrated to newer systems, it is done quickly and securely.
What can banks do to stay safe?
As banks look towards technology transformation, they need to do so with ultra-comprehensive planning: having the right approach, using the right tools, and embracing transformation best practices can result in favorable outcomes.
That said, here are some steps banks can take to stay safe during their technology transformation journey:
1. Plan for security from the word go: For banks, any security breach has a far more adverse effect than any other industry. Therefore, while setting out, it is important to plan for security from the word go.
a. Secure the underlying IT infrastructure as well as all that data it contains. Implement appropriate firewalls, secure your endpoints, and strengthen access control measures. Implement antivirus and anti-malware software, safeguard your networked computers, and implement security best practices across customer, social, cloud, and mobile channels.
b. Secure the data that is constantly collected and processed and be extremely vigilant against imminent threats. Implement processes to properly and responsibly safeguard customers’ data as well as your business data from potential breaches.
c. While launching new apps and websites that offer a great user experience, build them on a secure foundation. Integrating security into new solutions helps meet customer expectations; it can also help control the cost of a breach and the corresponding cost of lost business, lost reputation, and lost customers.
2. Take a phased approach to move away from legacy applications: Legacy systems are an integral part of any banking organization, but also the most vulnerable in the face of evolution. Although essential, they lack the performance, functionality, security, and experience that modern customers (and employees) have come to expect.
a. Take a phased approach for transitioning from dated and disparate legacy banking systems to a modern, digitally connected environment; identify applications, processes, integrations, and data that are indispensable to the technology transformation initiative; move the ones that are the most critical first, followed by the less-critical ones.
b. Have a capable team in place who can rearchitect, refurbish, refactor, or rebuild applications, custom processes, and integrations with external systems – ensuring security and compliance around-the-clock. Because legacy systems are extremely rigid, such revamping is necessary to break silos and mitigate associated risks.
c. Use a centralized platform for monitoring the security and compliance of your legacy systems – as they transition to a modern environment. Such a platform can deliver the insight you need into security loopholes while allowing you to take the right remediation steps – thus protecting customer data and privacy and bolstering their confidence in your organization.
3. Embrace cloud but opt for private or hybrid options: Cloud, with its availability and scalability features, is a major enabler of technology transformation. But banks, which are under the constant scrutiny of regulatory bodies, need to consider embracing private or hybrid cloud options to accelerate their technology transformation securely.
a. Invest in the right cloud skills to streamline the journey towards the cloud. The right resources can not only help transform processes and make them cloud-ready, they can also quickly identify issues and advise on cloud migration best practices.
b. Take a step-by-step approach to cloud migration; migrate the extremely critical workloads into the private cloud infrastructure and then plan for moving the less critical ones – which can either be moved to a private cloud or a hybrid cloud infrastructure for enhanced ROI.
c. Embrace concepts like DevSecOps to move applications and data to the cloud. DevSecOps can allow you to integrate security early in the lifecycle, thus ensuring your banking data is always safeguarded against potential threats and breaches.
Embarking on the digital transformation journey for banks is largely about rebuilding legacy applications and implementing modern systems in a way that they are capable of securing and protecting business and customer data 24×7. Despite the pressure to enable technology transformation as quickly as possible, banks need to start by becoming fully cognizant of the security risks involved. Building your technology transformation strategy with security at its core, modernizing legacy applications in a phased manner, and embracing a private or hybrid cloud model are key steps in meeting the constantly evolving demands of the modern consumer and keeping pace with the increasing disruption from rapidly emerging fintech companies.