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This article has been adapted and reprinted with permission from the Conjur Blog.
The emergence of new technologies has had a dramatic impact on the way Americans do business. For many industries, technological advances have transformed enterprise operation and structure. The financial services industry has been revolutionized by the digital age. New technologies and the shift toward the cloud have made some aspects of business operations easier and has facilitated operating on a scale that is otherwise unattainable. However, this shift does come with its own set of challenges. Here are four ways technology has shaped the financial services sector.
1. Data Is Virtual, Not Physical.
Years ago, credit unions and banks were focused on securing physical data—guarding servers and tangible files filled with personal and sensitive information. This emphasis has shifted as data is largely virtual. Of course, branch security remains a priority, but financial institutions must also fend off large-scale attacks, as the costs of a cyberattack are potentially devastating.
Automation has changed almost every aspect of financial services. Credit unions and banks have computerized tellers, digital records, and electronic payments, and all of this data can be sent across the world with the click of a button. The plethora of personal information collected in the course of business is sensitive, identifiable, and vulnerable. When a financial enterprise is hacked, a lot more than money is at stake.
2. The Cloud Covers the Globe.
Technology has changed the industry completely and has introduced some new key players. Now, credit unions and banks can operate across the globe, sharing information anywhere and everywhere. In recent years, new financial hubs have emerged to aid in the conduct of global business. As more players enter this space, everything graduates to a larger scale: infrastructure, IT teams, volume of data and the surface area that is vulnerable to attacks.
3. Security Is Everyone's Problem.
In years past, the only people truly worried about information security were the technicians who worked in the server room. Things are different now. As the volume of sensitive data has increased exponentially, so has the threat of infiltration and theft. The financial services sector must be on high alert for both insider and external threats, and a commitment to security must be shared throughout each organization. As hackers have become increasingly more stealthy and resourceful, enterprises must make sure their security is robust enough to thwart these attacks.
4. The Internal Hierarchy Has Shifted.
Members of the IT team are as integral to credit unions as financial experts, member service professionals, and specialists in every other department. This is especially true for credit unions and their business partners that share and store data in the cloud. These enterprises need experienced, talented IT teams to manage data and keep pace with current trends. The digitization of the industry means that financial services providers can move fast, innovate, and create new and exciting features. Maintaining agile IT teams is crucial to a financial institution's success in this ever-evolving and fiercely competitive marketplace.
Hackers have become more industrious and determined, and every business enterprise is a target. The financial services industry has a lot more at stake than other types of businesses. Unlike retailers, credit unions are entrusted with their members’ most personal information. A data breach carries the likelihood of devastating costs, both financially and in loss of reputation. Shortcomings in cybersecurity pose a significant risk to credit unions and the individuals and businesses they serve.
These four changes reveal how important infrastructure security has become for credit unions. Technological advances may allow your organization to operate on a larger scale and to expand revenue production, but these gains come with the price of continual vigilance to head off the nightmare of a data breach.
Elizabeth Lawler is CEO and cofounder of Conjur, Inc., a security company that focuses on security for next-generation infrastructure. Lawler has more than 20 years of experience working in highly regulated and sensitive data environments.
