When it comes to risk, technology is a double-edged sword. It’s both the problem and the solution. Once upon a time, risk mitigation in banks involved additional guards at the entrance and bullet-proof glass. Then we decided to go digital, and so did the crooks.
With increased automation, the areas of vulnerability have shifted away from the customer-facing desks and booths. Through techniques such as phishing, the threat of trouble has made it past the armed security, behind the glass, past the alarm and now lies in wait in someone’s inbox. The only way to combat a sneaky ninja like that is with a ninja of your own!
Mitigating risk is only one aspect of risk management. As the banking industry gets more digitized, technology has become an integral part of the business and is at the core of any discussion regarding risk. Technology is continuously evolving, and with that comes all sorts of tools and aids that can help a bank wade through the murky waters of cyber threats and sabotage.
So, as we look at risk, let’s focus on how technology can help us identify, measure, monitor, and mitigate risk. Finally, we will look at how I.T. can help us recover in the event of a disaster.
Even though the quality of your raw data is important, it is only helpful once you can derive value from it. Investing in data analysis enables you to identify the chinks in your armor. Some of the greatest frauds go undetected for years because the amounts stolen per transaction are seemingly insignificant. In order for a red flag to be raised, the analysis of your transactions has to be top notch.
With proactive monitoring and reporting, you can navigate these threatening waters. With strong analytics and virtual detectives on your team, you stand a better chance of reducing or even eliminating data security risks. Data is the bloodline of the industry, but without proper analysis, there is no way to leverage it for your security.
There’s an old adage that goes, that which gets measured gets done. In risk management, it is important to prioritize key areas of focus in order to maximize the resources available. Deciding on which metrics to use with reference to risk can be a little tricky, especially when we look at cybersecurity. According to the Ninth Annual EY/IIF Global Bank Risk Management Survey, some of the most important metrics used by banks include:
Now, for most community banks, this information isn’t available in-house. Most banks simply use the industry’s average, but that can be misleading. It is more useful to have your risk indicators weighted according to your own specific circumstances.
Why not get a third party who specializes in the prevention and resolution of technology-related incidents to advise you on which indicators give you the most accurate picture of your environment? This information is invaluable for decision makers, so you want to get it right from the very beginning.
“Big Brother is watching.” So should you—your network, that is.
To be totally secure, you need to ensure that you have virtual eyes on your vendors, specifically the information that comes from or passes to them. Transactions need to be monitored in order to raise the alarm early in the case of fraud. Of course, we cannot leave out emails and network monitoring to ensure that malicious malware is either prevented from getting through or detected as soon as it infiltrates the network.
Constant testing of the system to ensure that all is secure is no longer an option. Phishing testing and spam and virus protection are vital security components. When it comes to cybersecurity, we can no longer talk about “if” something happens; it’s a question of “when.”
Once you’ve identified what potential threats you face, and you’ve worked out which ones to prioritize, you now need to design a counterstrike.
The battle between fraudsters and enterprises is a never-ending game of chess, and the power keeps shifting between the players. Banks are usually on the defensive side of the board as the hacker adversaries are always on the offensive.
The current threats in the market inform the defense systems that we employ. Theft of user credentials calls for the introduction of a 2-Factor Authentication system.
You also must encrypt data, so that in the event it falls into enemy hands, it is still inaccessible. And don’t forget the first line of technological defense, the firewall that protects the network.
With high-tech gremlins all ways looking for a way in, technology is the best way to keep the threats at bay.
Recovery & Restoration
Sometimes, the bad guys have their way, and they infiltrate the fort. That can’t be the end of your business. Banks need to put in mechanisms to secure their ability to resume operations within the shortest time possible.
The first thing that comes to mind is backup.
It is imperative that you prioritize the crucial systems that cannot afford any downtime.
Although the focus these days is on cybersecurity, let’s not forget physical threats caused by natural disasters. Tornados, hurricanes, and floods can wreak havoc on your physical infrastructure. That may require your temporary relocation, and you’ll have to set up shop at a remote location.
Cloud computing and offsite backup systems ensure that you can access critical systems and applications in the shortest time possible. In addition to that, you will have to put in place a complete business recovery plan.
At JMARK, we can walk you through the establishment of that plan and the policies you will need to keep you up and running even when things are falling apart around you.
Risk is usually about doom and gloom, but every day, there are triumphant stories about resilience and victory. We want you to be one of those stories. Contact us via our website, email us at JMARKIT@JMARK.com or call us on 844-44-JMARK and let us help you reinforce your security.