Combating emerging cybersecurity threats in finance

What cybersecurity threats do financial institutions face and how does cloud RegTech help to address these challenges? We weigh in and provide examples from the Harmoney platform.

Cyber security in finance

Emerging cybersecurity challenges in the financial sector

Cybersecurity challenges are nothing new to financial institutions. However, recent advances in AI tools have increased attack opportunities for cybercriminals on a number of levels, including identity theft and social engineering scams. Digital banking with modern cloud ecosystems requires the appropriate operational environment and tools to counter these risks. In this blog, we explore the current and emerging cybersecurity challenges facing financial players – and how they can find an equilibrium between security, operational efficiency and customer service.

Typical cybersecurity threats for financial institutions

At Harmoney, we’re at the forefront in designing secure compliance solutions with our end-to-end compliance orchestration platform. Some of the recent attack vectors we’ve identified in our target market of banks, insurers and leasing companies:

Deepfakes for identity fraud

The use of AI to generate realistic audio and video is posing an increasing threat in identity fraud. Advances in artificial intelligence have rendered voice authentication services practically useless, as voices can now be easily cloned and clients can be impersonated in near real-time. Facial recognition and other forms of biometric authentication will be facing similar spoofing challenges soon. Implementing foolproof verification systems is critical to mitigate these risks.

AI-powered phishing

Cybercriminals can use AI to create more convincing phishing emails by analysing large data sets on potential targets. This makes phishing attacks more personalised and difficult to detect. Ensuring robust ID verification for both existing and potential clients is essential.

Machine Learning (ML) model attacks

Machine learning plays a critical role in automated decision-making processes like credit scoring, fraud detection and risk assessment. Adversaries try to use techniques like data manipulation to skew these models' outcomes in an attempt to influence these risk assessments. Implementing the right RegTech solutions to accurately assess risk scores is paramount.

Impact of cybersecurity threats on operations in finance

The ramifications of cybersecurity breaches on the operational security of financial institutions can hardly be overstated. Intrusions can lead to the loss or theft of sensitive customer data and other critical information, in turn compromising the integrity and confidentiality of data and leading to legal, financial, and reputational damage. Additionally, cybersecurity incidents may result in non-compliance with European regulations such as DORA, the broader NIS2-directive, or the GDPR.

As leading financial institutions have transitioned to cloud architectures, they are still figuring out how to address the associated risks. In an effort to safeguard their environments, some organisations have tightened cybersecurity measures to an extent that it affects their internal efficiency and customer service. Amid rising customer experience expectations [LINK naar deze nog te publiceren blog] and a pressure on human resources, striking the right balance between security and efficiency can be challenging.

How Harmoney helps to address cybersecurity threats

With a relentless focus on regulatory compliance, Harmoney contributes to a safer IT environment. Our platform focuses on addressing some of the most prevalent attack vectors that financial institutions encounter throughout their customer lifecycle, from strategic risk prevention during inboarding to continuous screening. Here are a few examples:

ID fraud mitigation

Harmoney uses various ID verification tools to fight identity fraud. Based on the specific needs of financial institutions, we can supplement traditional ID checks, country screening and name screening with additional features, such as document scanning, facial recognition and liveness checks. Our platform also natively supports leading external identity verification tools, including IDnow.

Tailored cyber risk mitigation

Harmoney supports fully customised risk matrices tailored to the unique cyber risks of financial institutions. Malicious actors often provide misleading and desirable answers to risk scoring questions. By enriching their case files with external data (e.g. blacklists), we can offer additional context and more accurate risk assessments. The Harmoney platform supports integration with any external or internal data provider for more exhaustive risk scoring.

Suspicious transaction response

Transactions can be automatically screened for immediate incident response and risk mitigation. Our system alerts team members instantly for further validation, reducing the response time for further risk evaluation.

Overall, Harmoney's robust workflows, platform expertise and seamless integrations with best-of-breed security tools and applications enable organisations to build a more secure financial ecosystem that provides compliance with complete peace of mind.

Harmoney offers a cutting-edge digital platform that streamlines intricate onboarding and compliance procedures, featuring automated screening functionalities. Interested in discovering more about our innovative solution? Reach out to us for further details!