Amid heavy cyber threats, drastically changing consumer expectations and regulatory pressures, three key tenets of digitalization can help strengthen industry trust

As firms in the region’s Banking and Financial sector serve an increasingly digital global economy, business leaders will need to ensure that their organizations have the necessary tools and processes in place to navigate and stay ahead of the ever-changing consumer and business landscape.

However, the industry has met not only pandemic-linked challenges, but numerous social and cybersecurity hurdles along the way that have reduced consumer trust (see below).

To retain stakeholders’ trust, senior executives must think of ways to advance in three key areas:  innovation, cybersecurity, and best-practice standards for bank compliance.

Innovation, cybersecurity and compliance
The three key areas of retaining and boosting stakeholder trust require further elaboration:

  1. Innovation
    In the banking and financial services industry, innovation includes the following digital capabilities:
    • Integrating data sources, breaking down silos
      The industry needs to have full visibility of the increasing numbers of data flows building up through automation and digitalization: business leaders will need to move away from legacy systems and onto unified platforms. With a central and unified view of critical IT services boosted by advanced analytics and intelligent incident response, banks and financial institutions can prevent expensive downtime.

      For example, one global payment platform worked closely with tech enablers to build a unified platform to run its mission-critical infrastructure globally, with a guarantee that billions in daily payment processing transactions stay up and running with minimal disruption.
    • Data-driven agility and business intelligence

      Finally, adopting more smart tech tools with AI and ML capabilities can help the industry to make sense of big data and take advantage of the digital economy competitively.

      Building data-driven agility in the industry requires having a “unified source of truth” to act upon—with speed and at scale.
  2. Cybersecurity

    Amid an evolving cyber threat landscape in a growing digital economy, CISOs need to look at modernizing their Security Operations Center teams by maximizing automation tools to strengthen their cybersecurity postures efficiently.

    By integrating individual data sources, observability in the monitoring process will be boosted, thereby positioning the industry to boost detection of potential threats.

    In Singapore, four major banks had experienced eight digital banking service interruptions since July 2021. The incidents were mainly due to internal system mishaps such as software misconfigurations, system malfunctions, and errors that occurred when the banks were making system changes.

    This incident is a firm reminder to CIOs and CTOs to consider transformative and innovative approaches. These could include adoption of AI and intelligent automation, or better network monitoring solutions to catapult their organizations’ speed, agility and cybersecurity to the next level.
  3. Compliance

    Fenergo’s 2021 Regulatory Fines Report showed that APAC regulators had issued a total of US$718.6m in enforcement actions to financial institutions in 2021, down 86% from 2020. However, the report revealed that the reduction in the number of billion-dollar fines was actually caused by the pandemic, as regulatory investigations that involved on-site probes had been put on hold. In short, compliance with regulatory requirements actually remains an issue in the industry.

    Yet, as financial institutions and fintechs increase their adoption of open application programming interfaces (APIs) to boost data sharing and business collaboration, they are being exposed to a top cyber risk vector. Tightened regulatory mandates governing this trend will require the industry to adopt real-time intelligence to gather large volumes of structured and unstructured data with ease and confidence. Such automation also helps to manage the high call volumes that could cause security issues.

    For example, to reduce laborious data tracking, one digital payment platform (which provides more than 250 payment methods and operates an alternative payments network spanning 400,000 physical touchpoints) managed to uphold complex regulatory compliance processes and remain cyber secure by adopting a unified data solution platform that allows teams to automatically ingest, analyze, and index all types of log data in just a few minutes.

As Australia, Singapore, Hong Kong and Japan serve as the regional headquarters for many global companies, especially those from the Banking and Financial sector, it will be imperative for industry leaders to keep ahead of the innovation, cybersecurity and compliance curves to navigate the ever-changing consumer and business landscape.