4 cyber risks your financial sector should be prepared for
The financial sector’s risk management approach has changed significantly in recent years. While some of these changes were expected, such as continued constricted regulations, others were less expected, including an increasing realisation that cyber and financial crime are closely-linked, and need to be addressed as an integrated security risk with an integrated strategy.
Sanjay Samuel, Head of Financial Crime Asia Pacific at BAE Systems Applied Intelligence, said: “These changes to risk management have been driven by significant cyber penetrations driven by financial crime. With the evolution of malware, the threat landscape has evolved and criminals are specifically targeting financial organisations; the volume of which is increasing ten-fold.
RELATED TOPIC: CSIRO predicts future cyber attacks could cost businesses and governments billions
“In addition to this, continued problems with compliance monitoring has been uncovered after the fact, showing these regimes have been ineffective. There are a number of large financial institutions that have significant and what they have thought are sophisticated monitoring regimes in place and yet have been unable to protect themselves effectively when an attack has occurred.
“There is a lack of cyber security analytics capability and technology in organisations. Most have a vast array of security technologies but these technologies don’t talk to one another and are often managed by different teams within the organisations.
RELATED TOPIC: Aussies loose $1.6 billion to cyber crime
“This means attacks may go unnoticed or not be responded to from a holistic security perspective, even though the organisation’s security technologies may actually have detected the incidents.
“As companies become aware of these gaps, it has led to higher budgets, increased integration of risk and security teams, and the emergence of conscious convergence strategies across cyber and financial crime monitoring services,” she said.
RELATED TOPIC: Cyber Crime in Oz: What Telstra and CommBank are Doing to Improve Cyber Security
BAE Systems have identified four key risks financial institutions may be vulnerable to in the coming months and years:
1. Lack of integrated approach
One of the continued risks for the financial sector is the lack of an integrated approach to cyber and financial crime. This could lead to some institutions being a soft target for ever more sophisticated fraudsters.
2. Criminals diversifying their activities
Increasing use of automation and the growth of identity compromises lets financial criminals diversify their activity, making it difficult to detect within a single institution. For example, there is an increase in money mule accounts that are only used once or a few times before moving on, making them harder to track. This could be addressed through more cooperation across the financial services industry.
RELATED TOPIC: Five Risk Management Issues for SMEs
3. Permeable boundaries
To service customers more effectively online in a multichannel environment, financial institutions tend to make their organisational boundaries more interconnected and therefore less secure. This security risk must be considered in order to protect both the organisation and its customers from unwanted perpetrators.
4. Mobile customer base
A more mobile customer base requires fast, easy access to services online, posing another risk to financial institutions as these same services offer fraudsters and hackers anonymity. It may prove difficult to identify authentic customers while continuing to provide the same user experience for customers.
“Financial institutions are increasingly aware of the risks, trends and changes in the sector. Traditional financial services institutions are geared up to handle this from a fraud and compliance angle. New entrants, such as telcos, who are becoming financial services providers in some cases, may have to play catch up on the types of systems they need to put in place to protect them and their customers,” Sanjay said.
Business Chief Legend: Ho Ching, CEO of Temasek
Ask Singaporeans who Ho Ching is, and the majority will answer the ‘wife of Prime Minister Lee Hsien Loong’. And that’s certainly true. However, she’s also the CEO of Temasek Holdings, Singapore’s sovereign wealth fund, and one of the world’s largest investment companies.
Well, she is until October 1, 2021, as she recently announced she would be retiring following 16 years as CEO of the investment giant.
Since taking the reins in 2004, two years after joining Temasek as Executive Director, Ho has gradually transformed what was an investment firm wholly owned by Singapore’s Government into an active investor worldwide, splashing out on sectors like life sciences and tech, expanding its physical footprint with 11 offices worldwide (from London to Mumbai to San Francisco) and delivering growth of US$120 billion between 2010-2020.
Described by Temasek chairman Lim Boon Heng as having taken “bold steps to open new pathways in finding the character of the organisations”, Ho is credited with building Temasek’s international portfolio, with China recently surpassing Singapore for the first time.
As global a footprint as Ho may have however, she has her feet firmly planted on Singapore soil and is committed to this tiny city-state where she was not only educated (excluding a year at Stanford) but has remained throughout her long and illustrious career – first as an engineer at the Ministry of Defence in 1976, where she met her husband, and most notably as CEO of Singapore Technologies, where she spent a decade, and where she is credited with repositioning and growing the group into the largest listed defence engineering company in Asia.
It’s little wonder Ho has featured on Forbes’ annual World’s Most Powerful Women list for the past 16 years, in 2007 as the third most powerful woman in business outside the US, and in 2020 at #30 worldwide.
But it’s not all business. Ho has a strong track record in Singapore public service, serving as chairman of the Singapore Institute of Standards and Industrial Research and as deputy chairman of the Economic Development Board; and is a committed philanthropist with a focus on learning difficulties and healthcare.
As the pandemic kicked off, she not only led active investments in technology and life sciences, with German COVID-19 vaccine developer BioNTech among the most recent additions to Temasek’s portfolio, but through the Temasek Foundation – the firm’s philanthropic arm which supports vulnerable groups close to Ho’s heart, handed out hand sanitiser and face masks.
So, you would be forgiven for thinking that at age 68, Ho might simply relax. But in March 2021, just as she announced her retirement from Temasek, Ho joined the Board of Directors of Wellcome Leap, a US-based non-profit organisation that’s dedicated to accelerating innovations in global health. Not ready to put her firmly grounded feet up yet it seems.