Today, you can apply for a loan, transfer money globally, check your account balances, and open a new account within a few minutes from the comfort of your home. The world is moving online, and financial companies like banks are trying their best to accommodate the heightened demand for online financial services.
However, financial institutions have unknowingly painted a digital target on their backs in their quest to be Agile and offer more flexibility to their customers and clients. Consequently, the finance industry witnesses the highest number of cyber incidents and is a favorite of cybercriminals.
However, not all is lost. Financial companies can shield themselves from crafty cybercriminals by employing effective risk management strategies.
Why Cybersecurity and Agile are Essential for Risk Management in Financial Companies
Financial companies are a reservoir of sensitive and confidential information. This is enough to lure bad actors to attack such organizations. Add the potential of stealing money directly from the source, and there’ll always be someone itching to breach their security infrastructure.
This makes it important for financial entities to work around the clock to monitor their internal technology and systems responsible for protecting digital assets and preventing cyberattacks. They must also proactively respond to any threats to their system or network.
But this is easier said than done, especially since imposing too many security measures often confines their reach and brings them closer to legacy status. It also makes it difficult for them to shift from the waterfall development methodology to Agile.
This raises the question: do financial companies need to adopt Agile methodology? Moreover, how is this model compatible with cybersecurity?
The unexpected relationship between Agile and cybersecurity
Following the waterfall’s linear processes, it becomes difficult for financial organizations to adapt to recent trends and capitalize on lucrative market opportunities before their competitors.
This is especially problematic for large organizations trying to keep up with non-traditional finance companies taking advantage of Agile methodology to offer personalized services to customers, such as instant credit score reports.
So, traditional finance entities must adopt Agile technologies, processes, and skills to promote digital finance operations. It’ll also allow them to become flexible and resilient.
Implementing Agile methodologies will help financial organizations:
- offer bespoke banking solutions to please modern customers,
- improve real-time experiences of customers,
- innovate and develop solutions and products relatively quickly,
- overcome complex banking challenges,
- integrate customer feedback, and
- focus on continuous improvement.
However, continuous software development and innovation, along with a digital shift, will diminish the effectiveness of the company’s security shields, making it vulnerable to cyberattacks.
While adopting agile is necessary for such organizations to avoid being relegated to dinosaur status, even a tiny hole in their digital armor can lead to unprecedented losses.
But this can be avoided if they employ agile and cybersecurity in harmony with each other. While the company innovates, develops, and grows, it needs to invest in automation for continuous testing and scanning.
This way, the company would be in the know and able to deal with potential security hazards swiftly and effectively. Moreover, simulating real-life cybersecurity attacks at every stage of the software product life cycle will strengthen their security infrastructure, preparing them for the worst.
Agile methodology will reinforce the security shields of the organization, and cybersecurity best practices will ensure that the company can confidently build and develop without outside forces wreaking havoc.
Wondering how financial companies can implement the two in sync with each other? Let’s find out.
Ways financial companies can employ Agile and cybersecurity together for effective risk management
Since Agile processes and tools like Kanban usually focus on the rapid development, adaptability, and flexibility of digital finance solutions, cybersecurity may fall by the wayside.
To ensure that security doesn’t take a backseat to development, especially if there’s a third party involved, financial companies can follow the best practices listed below.
Automation is at the heart of the relationship between Agile and cybersecurity. As such, there are several benefits of automation for an Agile business. So, it’s an excellent practice to employ fraud detection software and let AI (artificial intelligence) monitor bank transactions to detect legitimate transactions from fraudulent ones.
Further, such software works tirelessly to understand customer behavior through data analysis. They employ machine learning to sift through raw data, allowing them to draw parallels between risky individuals and suspicious customer behavior over time. This can help mitigate fraudulent activities.
But that’s not all. When used right, these solutions can be extremely beneficial for financial organizations.
For instance, if traditional banks and neobanks integrate banking fraud detection software with their security infrastructure, it’ll analyze big data to identify signs of fraud.
A thorough analysis of a customer’s digital footprints and reverse social engineering allows such robust software to gather more data about an individual to determine whether they’re real.
Upon analysis, the predetermined risk rules and patterns allow such solutions to alert banks in real time, eliminating fraudsters and bad actors bent on taking advantage of the organization. The best part, though? They can recognize and detect new attack strategies based on the bank’s risk rules and suggest new ones.
Moreover, reliable fraud detection software supports KYC (know your customer). It assists in verifying customer IDs and simplifies the new account opening process for the bank and the customer.
The Role of RASP and Cloud Computing
The next avenue to explore could be also combining cloud computing and RASP.
More and more companies are moving their operations and processes to the cloud. The reduced risk of data loss, around-the-clock customer support, secure environment, and low operating expenses attract businesses by boatload and drive cloud migration.
Moreover, cloud service providers often offer a myriad of products and services across the board to make it easier for finance enterprises to select the tools and other resources they need to develop cutting-edge solutions. The improved flexibility, speed, and mobility work wonders for the Agile framework.
However, the inherent security and secure product development environment might be susceptible to cyberattacks, especially in a shared model. This is where RASP comes in.
RASP, or runtime application self-protection, is a security mechanism that provides tailored application protection. Think of RASP as specialized bodyguards for your applications.
Since this technology is built inside or linked to its runtime environment, it can gather insights into an application’s working and data. This allows it to control app execution and detect and eliminate threats in real time that would’ve otherwise gone undetected.
In simple terms, RASP is an economical security blanket for the organization’s applications that shields it from unexpected attacks as well as identifies and removes weaknesses from its immediate vicinity.
Financial organizations generate, collect, use, and store a lot of data.
However, most of these organizations don’t categorize their data. Instead, they either mark it as highly confidential to protect it from prying eyes. Or they think that their internal security measures are enough to protect the data.
However, that’s not the case. Data, especially PII (personally identifiable information), is the new oil and is in high demand. Moreover, theft of personal data opens up avenues for fraudsters and other bad actors to assume someone’s identity and commit synthetic identity fraud.
Strengthening internal security policies and segregating data into separate categories based on their level of risk and importance will mitigate security risks and allow Agile managers to use data to develop software solutions better.
Additionally, diving deep into its data repository, taking time to classify data, and restricting them based on their sensitivity will make it easier for the company to measure its security risk. Moreover, providing access to employees per their clearance level allows them to cut through the noise and only focus on the required data.
Analyzing the stored data and understanding how and why it’s used allows companies to comply with government regulations and privacy policies regarding customer data.
Security is embedded in DNA
There’s no substitute for default security measures. Organizations must ensure that security is embedded in their DNA. You should be confident regarding your customer and client’s PII and ensure it’s protected with the best security and privacy practices.
However, to maintain their updated security posture, they must continuously assess potential vulnerabilities and patch gaps immediately. Educating your employees and implementing security best practices within the organization will help you fight internal threats and stay ahead of emerging cybersecurity threats.
Non-negotiable security policies and password protection guidelines will help you build a secure environment and dodge expensive internal threats. If security is a part of your organization’s core, your employees will make it a point to design Agile methodologies around security guidelines and not the other way around.
Focusing on security while being Agile
Security and Agile are two essential risk management strategies for financial companies to become future-ready. Shoring their defenses and fulfilling customer demand for modern digital solutions is necessary to thrive in the competitive landscape and compete with non-traditional startups.
Following security best practices, keeping security at the core of their product developments, automating fraud detection, and employing RSPA with cloud technologies will help finance organizations balance agility with security.