The unintended consequence of the financial industry’s app craze
Whether it is on a mobile device or tablet, apps have significantly impacted our lives and have made it easier to access information and request services. Banks have made a committed effort to further embed themselves in the app economy in an effort to offer seamless services. However, the push to digitalization has unintended cybersecurity consequences.
For recent examples, Citi announced a partnership with Amazon that allowed the bank’s customers to use their rewards points to make purchases on their platform. In Singapore, DBS Bank under its FastTrack arm integrated with several food vendors to reduce queues by enabling customers to make orders on their phones.
While the move of banks to embed themselves into the app economy is a good sign for consumers, it also exposes firms to external elements which could result in a cyberattack. A recent survey conducted by F5 Networks revealed that the digital economy is driving an increased reliance on application services. According to F5 Networks, the average number of apps used by a company has increased from 11 in 2016 to 14 in 2017. In terms of organizations that rely on 10 or more app services, that rate has increased from 60% in 2016 to 74% 2017.
“Banks have to interact with the younger generation digitally. Firms have to do it because their customers are requesting it. This is actually increasing the different types of cyberattacks,” explains Mohan Veloo CTO, Asia-Pacific at F5 Networks. “What drives banks or any company is what the customer wants. Banks are a lot more customer-focused now. Digitalization is because the customers are demanding it. If you don’t provide that customer expectation then it’s going to go somewhere else.”
As a result of growing exposure to third-party entities, financial regulators within Asia are encouraging financial firms to strengthen cybersecurity prevention procedures. The Monetary Authority of Singapore has announced plans to set up a Financial Services Information Sharing and Analysis Centre to coordinate co-operation and sharing of cyber intelligence. The Hong Kong Monetary Authority last May launched its Cybersecurity Fortification Initiative that involves penetration testing and vulnerability assessments.
“Cybersecurity incidents are now frequent across the financial industry,” states Ashley Alder CEO of Hong Kong’s Securities & Futures Commission (SFC). “There is no doubt that cybersecurity threats are now the top risk for banks and the broader financial system.”
17 Mar 2017