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April 29, 2020updated 23 Jun 2020 3:40pm

Banking & Payments Predictions 2020: Cybersecurity

By GlobalData Thematic Research

Cybersecurity is the practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks. Every new type of connected device represents increased cyber vulnerability. A wake-up year, 2020 will witness training and security awareness programs.

Shown below are the top cybersecurity predictions, as identified by GlobalData.

Cybersecurity is much more of an existential threat for banks in the near term than so-called ‘fintech.’ The increasing frequency and severity of attacks threatens to erode banks’ trusted reputations.

Every new type of connected device, including laptops, tablets, mobiles, wearables, and IoT, represent another cyber vulnerability. More internal uses of mobile and working from home bypass network and perimeter securities. Acquisitions make it more difficult to defend different infrastructures, databases, and computer assets in a unified, cohesive way.

2020 will see an ever-increasing diversity of potential actors and motives behind cybersecurity threats. These will range from organised crime syndicates, state-sponsored groups and militaries, hacktivists trying to make a point, and insiders attempting to steal information for personal gain.

Regulation will help and harm cyber defense. The breach notification requirements of GDPR, for example, have shed further light on the extent of the problem and enabled better co-operation. But open banking makes cybersecurity more difficult in various ways. Because of risk-based regulation, a number of largely unknown, unproven startups could be party to a data sharing exchange when the bank bears all the reputational risk.

When a bank receives external data, it can’t be sure that the ‘unproven’ firm can be trusted to be secure and compliant with organisational standards. Banks receiving data may never know which channel of data is compromised, thus compromising the security of the data.

2020 will have to be a wake-up year. After delays, Strong Customer Authentication will get done, effectively making the industry ‘passwordless’. This will mean going beyond biometrics and into real time, contextual behaviours and mapping relationships with trusted devices that are being used to secure payments, fund transfers, and trades.

Regulators worldwide will begin to be more prescriptive and collaborative. Banks will share more information with each other, some likely elevating chief security officers to board-level positions.

Alongside the technology response, ongoing training and security awareness programs will be critical, both for employees and customers. The latter require more frictionless content, such as instructional videos, and social media. The former, perhaps, is a reminder that in the rush to optimise UX, trust and security must still be top of mind.

This is an edited extract from the Banking & Payments Predictions 2020 – Thematic Research report produced by GlobalData Thematic Research.