Financial institutions are 300 times more vulnerable to cyberattacks than any other industry and the cost of remediating a cyberattack is 40 per cent more than any other industry, said a recent study. It has been time and again proven that one of the main reasons for a malicious attacker entering a financial network is for financial gains.
The growing cyberattacks across the finance world as well as business in general is making senior executives more aware of the need for security.
“In fact, our chief security officer recently remarked that earlier he would meet the board of directors of companies probably once a year for 20 minutes, but now the amount of interaction that we see with the board is 30 minutes every month. Cyber security is something that is playing on the minds of everyone,” said Rajsri Rengan, head of development — banking and payments — India and Philippines FIS, at the Business Standard BFSI Insight Summit.
Ranjeeth Bellary, partner, EY Forensic and Integrity Services, said: “Statistically cybercrime today is the largest in terms of monetary value. When it comes to crime it has surpassed illegal drug trafficking, which used to be a top, in terms of, crime. When it comes to (the) banking industry, there’s…(a lot)…of valuable information that hackers can have in terms of individual users’ data, etc.”
For cyber incidents, some responsibility also lies with individual users when they are not conscious about sharing personal data, whether online or in person, he said.
“When it comes to the banking industry, I think security is a very regulated aspect and, hence, the sector has evolved from that perspective. Also many fintechs have been very nimble, very agile in terms of adopting security,” Bellary said.
He agreed that security as an aspect is not restricted to the size of a company.
The topic of the session was ‘Who’s leading the way in banking technology?’
Proactively building for change is an ingrained practice, said Akshay Mehrotra, co-founder and CEO of Fibe (formerly EarlySalary).
“We believe that every three years technology changes. And we have to destroy what we have built ground up. In fact, as on today morning, we rolled out our Version 3, where we destroyed every piece of railroad tech that we built before. This means the new platform is far more stable. It’s meant to handle maybe 20x, customers, and take us through the next three years’ growth. It also meant to be far more secure. It’s based on a conceptual conversational UI (user interface), which means that every new consumer is different and every time I converse, I can modify my platform to cater to them,” he said.
Every fintech company wants to be a bank, and banks are eyeing the agility of a fintech firm, said Anuj Kacker, co-founder Freo, a neo bank, and executive committee member of Digital Lenders Association of India (DLAI). “If that be the case, then why should customer security be treated differently.”
He pointed out the recent guidelines of the Reserve Bank of India (RBI), the cornerstone of which was customer protection and customer data privacy.
The panel welcomed the recent RBI guidelines on the digital lending segment. Mehrotra said this was for the first time that a guideline is proactively seeing how to build business. “It is coming very early in the life of the sector. Usually this happens when the sector is (worth) a few billion dollars… It’s given a clear pathway on how to build a company, and more importantly how to structure your organisation in the correct manner. How does the interaction between risks, customer and technology have to be created? Whenever the regulator puts clear parts, you see those markets expanding dramatically fast, we saw that with UPI (unified payment interface),” he added.
The clarity that these guidelines have provided the players, Mehrotra believes, is that the lending sector could be a $1-trillion industry within the next three years.