Identity-related security breaches have become more common in the financial sector. According to the State of Identity Security 2023: A Spotlight on Financial Services – a global survey released by SailPoint – 93 per cent of all surveyed financial institutions have faced a breach in the last 2 years, with ransomware and malware attacks being the most common (at 43 per cent). Attacks have also become more frequent, with 72 per cent highlighting that the number of breaches has increased in the same time frame.
The financial sector is under constant scrutiny to ensure the highest standards of security and compliance, as breaches can lead to severe consequences. Furthermore, the rapid evolution of digital banking has increased cyber threats, compliance requirements, and the need to address security gaps. The sector also faces challenges such as high rates of insider data breaches, complex corporate structures, and reliance on manual processes for tracking data access and user identities, making it vulnerable to inaccuracies and inconsistencies.
Financial institutions must look towards adopting a proactive approach in managing risks associated with handling sensitive data, while continuously monitoring and assessing their security posture, leveraging advanced cybersecurity solutions. By implementing a comprehensive identity security solution with artificial intelligence and machine learning technologies, financial institutions can automate complex tasks enabling existing staff to focus on more strategic initiatives, and mitigate the risk of breaches and ensure compliance with regulatory requirements.
Also Read | Behind the Numbers: Decoding the 2023 Cybersecurity Landscape in BFSI
The challenges of identity management in financial services
Implementing a strong identity security strategy is a necessity, and while many financial institutions are beginning to invest in identity security solutions, 91 per cent acknowledge the challenges faced, with most frequently cited difficulties including integration flexibility (38 per cent), high configurability (35 per cent), and complex implementation (32 per cent). Considering the wide variety of applications utilised in financial environments, both internally and externally – these challenges are expected. Other challenges include regulatory compliance issues (31 per cent) and a shortage of appropriate skills to modify or introduce new systems (27 per cent).
There are also other identity-related challenges such as insider threats involving individuals with authorised access to sensitive data, systems, or facilities, whether intentionally or otherwise, comprising employees, contractors, or third-party vendors. Another challenge – movers’ privileges, with reference to the access rights and permissions granted to employees when they change roles or responsibilities internally, can also result in unnecessary risks and potential security breaches if the user’s access is not adjusted accordingly. Traditional banks and financial institutions that have been slow to adopt digital technologies as well as still relying and operating on legacy technologies also further complicate the implementation of new security measures to better mitigate these issues.
Identity Security in Digital Banking
As financial institutions look towards the evolving digital landscape, embracing an effective identity security solution can help address issues above, and ensure they are ready to adapt to changing market demands and maintain the highest levels of security and compliance. These include:
- Integration flexibility: Identity security solutions can provide the necessary flexibility for organisations adopting new technologies, ensuring a seamless integration with their existing systems and applications. As such, banks can incorporate new digital services and platforms without compromising security.
- Complex separation of duties (SoD) policies: Ensuring proper separation of duties is critical for preventing fraud and maintaining compliance with regulatory requirements. However, managing SoD policies can be challenging due to the complexity of financial institutions’ organisational structures and the need to coordinate access controls across multiple systems. Identity security solutions can help streamline the management of SoD policies by automating access controls, monitoring user activities, and providing real-time visibility into potential conflicts. This allows financial institutions to effectively enforce SoD policies, reduce the risk of unauthorised access or fraud, and eliminate compliance gaps.
- Outlier detection: For financial institutions, implementing an identity security solution capable of identifying unusual patterns or behaviours deviating from the norm can help spot potential risks or anomalies. By analysing vast amounts of data and leveraging advanced analytics, machine learning, and artificial intelligence, outlier detection can provide valuable insights to help organisations detect and remediate risky identity access and respond to potential threats in real-time.
As the financial sector continues to embrace digital banking, ensuring the protection of sensitive data and maintaining regulatory compliance through robust identity security practices will be critical for the industry’s success.
Views expressed by Abhishek Gupta, Managing Director, India, SailPoint
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