Banking technology is expected to grow to $2.4 billion by 2020, with significant advancements in digital transformation efforts. But with the surge in digital banking services, hackers are increasingly focusing on vulnerabilities in emerging-market countries like India leaving organizations with no choice but to undertake a major revamp of cyber security.
In an increasingly digital landscape, customer centricity and anytime availability are transforming how banking and financial services are delivered in the country. With customer expectations at an all time high, the focus on improved digital and mobile banking experiences has seen rapid increase. This has been directly proportional and can even be squared in terms of the security tools and reinforcements in the sector. Keeping up with competition is a continuous task for BFSI CXOs, which has influenced heavy investment in advanced technologies recently as Machine Learning, Artificial Intelligence, Behavioral Analytics, IoT and Mobility being at the forefront of every new BFSI offering. This has fuelled innovation among both vendors and internal product development teams in enterprises.
The industry has been witnessing a huge shift among financial services organizations towards cloud-based services and infrastructure to cater to scaling consumer demand for greater convenience, mobility, and simplicity in digital capabilities. With innovation in mobility and digital banking, cybersecurity as a menace shift among financial services organizations towards cloud-based services and infrastructure to cater to scaling consumer demand for greater convenience, mobility, and simplicity in digital capabilities. With innovation in mobility and digital banking, cybersecurity as a menace appears to be a persistent thorn in developments and unhindered success of BFSI innovations. Black hat hackers have been siphoning money from banks through small-scale to large scale critical cyber frauds through phishing attacks and cloning/stealing of cards/net banking identities/ information. Data from India’s apex bank RBI shows that during 2008-17, banks in India faced 130,000 reported cases of cyber fraud involving an estimated Rs. 700 Crore. The money siphoned off from one of the banks in the recent time is 14 times the bank’s FY18 profit. Cyber threats have been a constant for Indian financial enterprises where a severe cyber-attack can be bad enough to result in bank failure.
THE TECHNOLOGY LANDSCAPE
Digital transformation based on customer centricity and mobility being the norm, one of the most significant technology developments in BFSI has been the Cloud. The benefits of cloud for digital banking purposes extend far beyond happy customers and investors. As Rajesh Maurya, Regional Vice President, India & SAARC, Fortinet points out, “In fact, data shows that by shifting their back-office functions to the cloud, banks can achieve savings between 30 to 40 percent.” With the deep embedded challenge of create more customers, and keeping the current ones interested, several factors are affecting the technology acquisition plans of enterprises today. As Biju Varghese: SVP, Enterprise Solutions, SAARC & APAC, eMudhra opines, “Various factors affecting technology acquisition include enhancing core banking value; revamping the digital agenda; moving from information to insight; dealing with a changing risk regime; from cash to electronic modes of payment; grappling with financial inclusion and accelerating innovation.”
Operational factors such as the Capex involved significantly impacts technology developments for BFSI enterprises. Anshuman Pandey, Chief Technology Officer, Goals101 explains, “BFSI organizations already have systems in which they have invested heavily, and hence are increasingly cognizant of what new investments they make. With the prevalence of cyber-attacks, phishing, social engineering, and the likes, security and regulatory compliance aspects of each new technology acquisition are significant factors.” Anshuman continues, “A key contributor to acceptance or reluctance in acquisition, however, is the learning curve. Like any other established industry, getting employees to alter the way they work, and taking time out from core business to train employees is a challenge for BFSI organizations.”
This is a critical factor as Rakesh Viswanathan, Regional Director at Cyberbit points out, “Acquisition of technology is never a problem, but the concern is the troubling gap between the inherent value of the technology and the ability to put it to work effectively. To close this gap, BFSI organizations need skilled teams which can use these technologies in a best possible manner without compromising on cyber security.” There needs to be increased focus by BFSI organizations to train their workforce in technology operations and cyber-security awareness to ensure smooth delivery in actuality.
CHALLENGES WITH DIGITIZATION
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