During the WFE Technology Conference 2019 in Umeå, Sweden, the panel discussion on new cyber frontiers in new markets that I took part in was enlightening and engrossing.
The growth of security solutions is outpacing IT spending globally due to the rapid proliferation of digital, increasing regulations on security, risk and data privacy, and the growing volume of cyber threats. There has been a surge in the number of threat vectors and vulnerabilities in enterprise networks, thereby increasing cyber security risk exponentially. Financial institutions including securities and capital markets firms are not immune to this risk given their increasing reliance on information technology, growth in mobile/digital channels, and accelerating pace of electronification of global markets. The risk and exposure can be multi-fold: direct operational and financial impact due to damage caused by successful cyber-attacks, or indirect impact due to reputational risks and financial penalties from regulators who are increasingly adding to the infrastructure and compliance requirements around cybersecurity.
- Data protection has grown in importance, with the roll-out of the European Union’s GDPR rules that provide strict new controls on personal data; companies now need the same level of security for an individual’s data. Capital markets need to invest more in protecting data to comply with regulations.
- Digital ecosystem is driving a focus on privacy: privacy concerns play a key role and can drive market demand for security services. This may impact a variety of segments such as Identity and Access Management (IAM) and Data Loss Protection (DLP).
- Integrated 3S approach is required for addressing cybersecurity measures:-
- Simplify – Top down approach to define and determine the risk tolerance of the firm based on the data sensitivity, likely impact of breaches etc and identify capabilities required to address those security issues.
- Secure – Identify and implement data privacy and content control measures in line with risk and compliance mandates, and establish security governance processes for metrics, visibility, and control on the overall security posture.
- Sustain – Establish outcome-based managed services partnerships for security platforms like Identity Management, Security Operations, Security incident and Event Monitoring. Deploy appropriate monitoring and operations management tools for supporting audit & governance processes.
- Platform-based approach to managing cybersecurity: managing cybersecurity in the digital age requires a vastly different blueprint to traditional methods of managing security. The imperative is to create a multi-disciplinary approach that combines risk and compliance, IT, and security capabilities and deliver platforms that address the broad security needs of an organisation. The security platforms typically cover a gamut of solutions that span across core security domains, operations, audit/ review, and AI/ analytics.
- Leverage new age technologies for cyber security threats: cyber threats are growing in frequency and severity, thereby making traditional approaches to security less effective. Along with an increased focus on fundamental aspects like updating patch management and stronger third-party risk and compliance procedures, emerging technologies like Cloud, AI and ML, RPA, and Big Data can help orchestrate more effective cybersecurity strategies.
- The use of sequential hashing and cryptography in blockchain systems, along with decentralised structure has made it impossible for a party to alter any data on the ledger, thus protecting client data and trade information and making it nearly impossible for hackers to attack.
- AI and Machine Learning (ML) algorithms help in fast detection of threats and limiting their spread by identifying outliers from normal patterns. They also help in keeping pace with the continuously changing threat landscape by training algorithms on new trends.
- RPA helps in lowering security-related efforts associated with employee training on security policies and practices as it provides a zero-touch environment. Tools and solutions come with audit logs that provide an immutable trail on the usage of personal identifiable information, which is required for regulatory reporting and compliance purposes.
- Cloud is reaching an appreciable maturity level. Firms should proactively address the risks associated with cloud computing and map regulatory requirements with their cloud approach to ensure resilience, availability and disaster recovery capabilities. Cloud-based security solutions complement the on-prem solutions with low maintenance costs, high availability and advanced analytics.
- Big Data is being used to identify cyber-attack trends from the vast amount of security data mined across end point devices. One of the growing technologies in the field of analytics is UEBA (User and Entity Behaviour Analytics) which takes note of the normal conduct of users and detects deviations from normal patterns using machine learning, algorithms and statistical analyses.