Embrace the cloud to stay competitive, says PwC

BY Matt Atkins

According to a new PwC report, modern day financial institutions face increasing demands on two fronts: the need to consolidate their data centres and increase business agility.

After the burst of M&A activity which followed the 2008 financial collapse, organisations have been left with an overlapping mix of data centre assets which must now be consolidated into a more cohesive whole. In addition, in a continually changing business environment, institutions are feeling the pressure to innovate and embrace new technology.

In light of these challenges, says the report, CIOs are increasingly turning to cloud technology to transform their technology infrastructure and deliver consistent service to their global customers. Of the respondents to PwC's survey, 71 percent said they would invest more in cloud technology – up 18 percent on the previous year. The adoption of private clouds offers institutions a chance to address their data consolidation needs, in turn boosting IT agility, according to PwC.

Embracing cloud technology offers numerous rewards. Using the cloud, leading institutions are able to: adapt more rapidly when entering new markets; improve IT services to business units, enabling units to better serve their customers; and improve the consistency of service to customers worldwide, resulting in greater customer satisfaction and loyalty. The cloud also allows institutions to cope with the changing demands of software development lifecycles and technology change programs.

Security concerns remain a major consideration in cloud adoption. By its very nature, the cloud forces IT services to pay closer attention to potential risks in the strategic planning and implementation of data centres. However, while 46 percent of respondents reported their organisation uses cloud services, only 18 percent of financial organisations included provisions for the cloud in their security profile.

Moving to the cloud is a complex process, says PwC, and cloud strategy should be developed with the input of top management across the company. But when an institution strategically implements a private cloud solution, it can help the overall objectives of the organisation, as well as its IT goals.

Report: FS viewpoint: Clouds in the Forecast

Security concerns restrain mobile banking

BY Matt Atkins

Consumer fears surrounding security have dampened interest in the mobile technology services of financial institutions worldwide. These are the findings of Deloitte's new report, Mobile Financial Services: Raising the Bar on Customer Engagement, based on survey data from Andrews Research Associates.

Though financial services companies are largely eager to enter the mobile transaction market, the industry still has work to do before it captures the full potential of today's technology, finds the report.

Of those respondents who do not regularly use mobile devices for financial services, sixty-one percent cited security issues as the prime reason. Over one-third of those surveyed were most insecure about using financial services on mobile devices due to lack of trust in the security of the Wi-Fi and mobile networks transmitting their data. Twenty-eight percent were worried about their mobile device being lost or stolen. One in five respondents believed that the risk of identity theft was greater with mobile transactions.

To address security concerns, respondents supported measures to create more secure Wi-Fi or mobile networks, systems that automatically disable stolen mobile devices, and the adoption of more secure mobile identification methods such as biometric technology.

The survey did indicate that mobile products have been more widely adopted in the banking sector than in other financial service sectors, such as insurance. However, it still finds that banks "are at a decided disadvantage compared to other sectors" when it comes to security.

“The financial services industry is entering a new phase in its digital evolution, with mobile technology reshaping customer engagement in a dramatic manner, and increasingly becoming the primary method of a consumer's interaction with their financial services providers," said Jim Eckenrode, executive director of the Deloitte Center for Financial Services. "To boost adoption and set the stage for more ambitious applications, companies will likely have to take tangible steps to reassure consumers about the security of their mobile financial transactions."

Report: Mobile Financial Services: Raising the Bar on Customer Engagement

Cyber-alert stats paint stark picture

BY Matt Atkins

The average US firm faces 10,000 potential cyber-security alerts daily, more than any IT team can possibly process, according to an analysis of web traffic by threat protection and containment firm, Damballa. The Damballa State of Infections Report Q1 2014 culled information from ISP and mobile traffic, as well as its own customers, finding that the busiest networks generated up to 150,000 alerts.

While the report makes clear that a large number of these alerts are innocent, the problem lies in the sheer volume of alerts that firms face. The scale of the problem leaves most IT teams with little hope of keeping on top of the daily alerts, allowing infected systems to hide more easily. “Bystanders may think it’s outrageous that a breach could go undetected for months,” says Damballa. “Main-stream media has certainly stirred the pot with stories about security teams ignoring alerts. But the people engaged in daily hand-to-hand combat know that an alert doesn’t equal an infection – and that’s part of the problem.”

Large multinational firms with a global reach face up to 97 active infected devices per day, according to the report, a relatively small amount. However, the manual work required to actually find infections is the number one security challenge. An overload of security alerts aids cybercriminals such as those who attacked firms in the US retail sector during 2013. During the time of its three-month security breach, Neiman Marcus experienced 30,000 security alerts. Sifting the alerts that indicated criminal activity from false positives and innocent but anomalous behaviour, extending the period in which the firm was under attack.

Traditional IT security controls can't stop today's threats, says the report. Organisations need to automate labour-intensive processes like alert chasing and focus on discovering successful infections and triage the devices at most risk. “There aren't enough trained security professionals in the world to solve the problem,” says Damballa.

Report: State of Infections Report Q1 2014