Last updated: 25 July 2016
Recently on the blog, we discussed the opportunities the IoT presents for banks. The proliferation of data allows financial institutions to better evaluate risks and improve lending decisions, provide a personalized service to customers and deliver additional profit.
However, there is another side to the IoT revolution. The increase in data means that there may be more opportunities for hackers to infiltrate financial institutions. That’s why building trust and robust cybersecurity architecture is so crucial in the age of the IoT.
The first challenge for banks is to capitalize on the benefits of IoT without jeopardizing consumer trust. For instance, it’s likely that financial institutions will use live geo-location technologies and data to provide tailored services to customers, depending on where they live and how they manage their money. However, in order to ensure customers are happy with their data being used in this way, there will need to be solid authentication solutions. A username and password combination is no longer enough, as we’ve mentioned in previous blog posts. That’s why banks are increasingly turning to alternative security mechanisms, although these present challenges of their own.
For instance, biometric authentication is one solution which has been proposed as an answer to financial fraud. This can involve fingerprints, finger vein and iris scans, as well as facial recognition software. While these solutions are much stronger (and more convenient for consumers) than passwords, there is still the issue of trust to consider. Customers must feel confident that the information they’re sharing with banks – their location, behavior, fingerprints – won’t be used for other purposes they are not informed about, and are properly secured.
That’s why we suggest combining sophisticated authentication technologies with strategies to ‘Secure The Breach’. Techniques like encryption, tokenization and solid and secure key management need to be deployed to protect consumer data. A single hack could prove devastating to consumer trust, and might mean missing out on the benefits the IoT can bring to the financial sector. The message to banks, then, is to make sure they’re prepared. The possibility of an attack should be seen as an inevitability and not as something to be put on the back burner.
Our Senior Vice President, Howard Berg, recently outlined his thoughts on the future of cybersecurity in banking. He states that in order to fully embrace the IoT and capitalize on its benefits, banks need to ‘step up to the new security challenges to build and maintain consumer trust’. Clearly, it’s vital that financial institutions develop strong security strategies in the age of the IoT.
What do you think about the future of cybersecurity in banking? Let us know by tweeting to us at @Gemalto or by posting a comment below.