Author: cyber-security-blog

How Cloud Banking can Enhance Financial Inclusion in Southeast Asia

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The global financial sector is scaling at a rapid pace as it is undergoing a Digital Transformation fueled by new technology, shifting customer behavior, and disruptive fintech competition. The Covid-19 pandemic and the subsequent desire for further digitization have boosted the need for better technology in the industry.

However, in the Southeast Asian region, home to an estimated 661 million people, only 52.64 percent of these people have bank accounts. This is mainly due to the lack of financial inclusion in the region. Financial inclusion refers to the ability of individuals and families to access and use basic financial services, such as savings accounts or credit, regardless of their income levels or location.

Cloud banking is the technology that can enhance financial inclusion in Southeast Asia and has the potential to help banks and financial services providers to provide better services to the underserved population of the region.

How can Cloud Banking Enhance Financial Inclusion?

Cloud computing uses shared resources and virtualization to improve financial inclusion by providing the infrastructure that allows banks to offer their services at a lower cost, making them more accessible to individuals with low incomes.

Financial institutions benefit from their flexibility, scalability, and operational resilience. It enables them to provide underserved and unbanked areas with cost-effective digital financial services like money transfers, loans, and insurance. It also allows for cost-effective scaling, facilitating the supply of inexpensive products and services to large numbers of unbanked consumers and small companies.

By allowing more significant innovation, cloud computing may help to promote financial inclusion and drive economic and social progress. Companies like Amazon Web Services(AWS) also assist financial companies across the area with their infrastructure needs and provide advanced payment options. At the same time, others are using this to empower small and medium businesses, lowering bureaucratic hurdles and developing new growth models.

Policymakers around this region are enacting forward-thinking policies to boost digital finance innovation. Some nations’ regulators have put in place principles-based outsourcing frameworks to allow cloud service providers to provide novel infrastructure services.

Cloud advancements may give the drive that has so far been absent. Cloud Computing can aid incumbent financial institutions’ digital transformations as well as new challenger fintech’s market debut by delivering high-volume, high-intensity computing capacity that enables digital financial services.

Conclusion

Cloud banking is a cutting-edge technology that can enhance financial inclusion in Southeast Asia by offering many advantages for both banks and customers. It allows banks to operate with less capital because they do not need expensive infrastructures like servers and buildings. It also provides more convenience for customers because they can do their transactions from anywhere at any time with an internet connection.

Implementing Top Cyber-Security Strategies for Robust Digital Finance

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As the world’s financial environment becomes increasingly cashless, the growth in digital payment transaction value is increases. This means that vendors of Cybersecurity Services will have more opportunities. Banking and payment companies are pursuing newer and more powerful security infrastructure and services to combat fraudsters.

Virtual Private Networks (VPNs) are the most widely utilized method for protecting data by businesses of all kinds and individuals. VPNs have become must-have tools to safeguard all information shared over the internet, such as payment information and tax returns. In addition to using a VPN to reduce cybercrime risk, there are various more security precautions to take.

Below are the few strategies to consider for a Robust Digital Finance

1. Utilize a Firewall

A Firewall is a type of security device that monitors incoming and outgoing network traffic based on a set of established rules or ‘perimeters’, and can prevent illegal access from the outside. They prevent the malicious source from communicating with your computer. Client firewalls and Appliance firewalls are the two most common types of firewalls. A client firewall is a piece of software that is placed on a computer and monitors all network traffic. Whereas, an appliance firewall is a hardware device that connects your computer to the internet.

2. Update Applications and Operating Systems

Software and application updates are one of the important measures to keep yourself safe from cyber attacks. Without these updates, it compromises the functionality of the computer system. These updates allow end-users to enjoy new features and other new enhancements. They eliminate software bugs and improve efficiency. One of the main reasons of updates is that it prevents security breaches.

3. Perform Regular Backups

One of the overlooked aspects of business security is irregular backup schedule. Depending on the size of the business, backups can be done on a daily, weekly, or monthly basis. Backups are important for the business because loss of any data can have a negative image on the brand. Cloud computing is said to be one of the safest and convenient options. However, additional backups are required to be on the safer side.

4. Training Employees

Not just the applications and Cloud Computing that can make a business threat free, it is also the employees who enforce these softwares – which is why employee training is important. It is important to instill awareness of the different forms that cybersecurity threat can take. It is important for the employee to be able to identify and report cybersecurity threats.

5. Manage User Permissions

Role-based access controls programmes can be used to manage user permissions. It’s used to guarantee that staff only have a certain level of access to the information they need to do their jobs. Successfully managing user rights can reduce ‘inside threats’, increase staff productivity, and save overall expenses.

6. Use Unique Passwords and Change them Frequently

Using unpredictable passwords and periodically updating them can lower the risk of compromise.This can throw the hackers little off guard. When hackers cannot predict the password, they tend to attempt all the possible passwords. Brute forcing is only effective when the passwords are simple. Hence, having a complicated unique passwords can go a long way.

7. Develop and Enforce Mobile Access Policies

Businesses may empower people by granting access to corporate files, provisioning apps to mobile devices, and securing sensitive data by restricting access based on role assignments via mobile access policies. Enrollment policies can check that the devices is policy-compliant, that it fulfils the minimal OS requirements, and that it can enrol a certain number of devices. To prevent information from leaving the workplace, data leakage security restricts mobile device functionalities such as cut, copy, paste and so on. Maintain strict adherence to these policies at all times to guarantee that data is kept safe.

Although the ability to do business over the internet has provided us with a great deal of convenience, the prevalence of cybercrime only requires the use of best practises to keep a digital business safe.

This include keeping software up to date, employing strong passwords, teaching personnel about security best practises, and following to the company’s access regulations.

A secure business should ideally be reinforced both internally through best practises and externally through the use of the most up-to-date security technologies and software to ensure confidence while dealing online.

Major Cybersecurity Threats in Banking to Watch Out in 2022

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As a result of globalization, the world has become a global village. The world’s economies, cultures, and population have become increasingly intertwined and entangled as a result of an increase in the demand for digital transformation. The days of manual banking have long gone. Banks and other financial organizations have rapidly adapted to digital technologies over night. Millions of users are using online banking and other internet mediums to conduct business of huge value.

It is pretty evident as to why the banking and financial sector has become a prime victim of cyber security threats. The cybersecurity world is of a dynamic nature and with that, threats becoming increasingly complex. The stakes are pretty high when it comes to banking and financial sector not only are large sums of money at risk, but when banks and other financial systems are compromised, it can result in disruption to the economy.

Banking and financial institutions collect, process, and store a large amount of confidential information and data on their servers and systems. With the continuous rapid growth of volume and sophistication of cyber threats, swift efforts are required to protect and secure critical corporate and personal information, as well as, national security. The internet is important and profitable, but it is also vital to understand how to use it safely.

With the extent and frequency of data breaches are increasing, it’s more than important to be aware of the upcoming cyber security trends to watch-out in 2022.

1. Ransomware

Since 2018, the annual share of ransomware attacks faced by enterprises have increased, culminating at 68.5% in 2020. And for several years now, ransomware has been a huge nuisance for businesses all over the world, and it doesn’t seem to be resolved anytime soon. This is a type of cybersecurity threat in which files are encrypted and users are locked out of their systems, with hackers demanding money to gain access again.

2. Risk posed by remote work

The use of remote work, hybrid workplace, and cloud-based software platforms has grown practically universal as the pandemic approaches its third year. This also means that financial institutions are more vulnerable to cyber threats than they have ever been. Employees are no longer always accessing data on organization’s networks and servers, necessitating increased surveillance.

3. Cloud-based Cyber Security Threats

As more software systems and data are housed in the cloud, cybercriminals have seized this opportunity, and cloud-based attacks have increased. To protect themselves against critical breaches, the banking and financial sector must ensure that their cloud infrastructure is configured securely.

4. Social Engineering and Phishing Attacks

Social engineering is one of the most serious threats to banking and finance. People are amongst the weakest link in the security chain, as they can be tricked into divulging important information and credentials. This can impact both staff and consumers of the institution.

Social engineering can take numerous forms, such as phishing campaigns, or sending false invoices that appear to be from reputable sources. It is critical to keep your employees up to date on social engineering tactics and how these threats are evolving.

5. Supply Chain Security Threats

Targeting a software manufacturer and then producing malicious code to customers and others in the supply chain in the form of products or updates that appear to be legal is becoming an increasingly common way of malware distribution by cybercriminals. These threats compromise distribution systems, allowing cybercriminals to gain access to the networks of the supplier’s customers.

CONCLUSION

By planning ahead of time to deal with cybersecurity threats and solutions now, you maybe ahead of the game in 2022. There will always be new difficulties in cybersecurity, but if you have the basics in place, you will be well-prepared to tackle anything that lies ahead.

Digital Customer Experience in Banking and Financial Services

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In the Banking and Financial services sector, customer experience plays a vital role in differentiating the institutions from their competition. With ever-changing customer demands and a plethora of alternatives to choose from in this digital era, only a great customer experience can enhance customer loyalty and satisfaction, with better retention.

However, the pandemic has forced the Banking and Financial sectors to go digital, and their CX has been influenced by how well they handle the new digitization. Thus, simply being digitally sound is not enough; institutions must also focus on becoming customer-centric digitally.

Here are four Digital CX trends across Africa’s banking and financial services that institutions should watch out for:

1.Using Mobile app data to improve Products and services

The majority of institutions are going digital by launching their own mobile apps these apps collect a lot of consumer data that institutions can use to enhance the customer experience. Data analytics systems and machine learning algorithms help you extract useful information from this consumer data, which can then be used to build new products, enhance existing processes, better empower customers, and improve the overall customer experience.

Stanbic Bank, one of Uganda’s largest commercial lenders, is encouraging customers to transition to its digital banking systems by waiving digital transaction fees in order to improve their customer experience.

2.Integrating Artificial Intelligence with human power

One of the most important customer touchpoints is when they call the helpline for assistance. Nothing can be more aggravating for a customer than calling their bank’s customer care to report a problem only to be placed on hold.

When encountering a problem, users may now consult AI-enabled chatbots rather than waiting on the phone. Furthermore, Conversational AI has advanced significantly in terms of its ability to accommodate and handle customer issues, making it a superpower for rapid resolution.

3. An Automated onboarding process

As the adage goes, “first impression is the best impression,” for a great first impression, a positive customer experience during onboarding is crucial. New customer onboarding traditionally involves a great deal of administrative work and raises the risk of process bottlenecks, putting consumers’ patience to the test. Banks may utilize automation to speed up critical aspects of the process, allowing consumers to create accounts even faster and improving the entire customer experience.

4. Cloud-Based Hosting

Banks and regulators in Africa are gradually changing their minds about cloud hosting. By moving to the cloud, banks regain control of their business models and innovation cycles, allowing them to develop excellent consumer solutions with agility and speed.

Absa Group, one of the major African financial services companies, has migrated many of its operations to the cloud, which has enabled them to deliver a great end-to-end digital experience, especially given their geographically dispersed staff and client base.

According to international consultants McKinsey, the number of Africans having bank accounts would rise from almost 300 million in 2017 to 450 million by 2022, with revenues growing from $86 million to $129 million during that time.

With most institutions aiming to be digital-first banks, it’s high time for them to begin investing in their digital client experience.

How AI is Transforming in Banking and Financial Industry.

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Over the past decade, we have seen substantial growth with respect to digital transformation in banking and financial services. However, the rise of fintech has increased regulatory pressure on banks and financial institutions to closely comply with regulations while also enhancing the customer experience and operational efficiency.

The introduction of Artificial Intelligence (AI) in banking could be the key to enhancing operational efficiency and meeting the demands of banking and financial services. From analyzing customer behavior to improving back-office operations, AI in banking is poised to drive incalculable value more than ever before.

Here are five ways through which banking and financial services can leverage AI

1.AI in regulatory compliance

    Regulatory compliance in banking has always been a human extensive work, with no clear ROI. AI-based software assists institutions in facilitating regulatory compliance more efficiently and effectively than current capabilities.

    AI can help compliance officers supplement their skills while also helping them to scale their operations beyond what is achievable manually. Machine learning (ML) paired with natural language processing (NLP) can help comprehend data inputs such as e-mails, spoken words, instant messaging, and documents, reducing the burden on officers even further.

    2. AI for data quality assurance and macro prudential surveillance

    In the banking sector, the volume of data received is usually enormous and it becomes difficult for authorities to process the same using traditional methods.

    By automating macro prudential analysis and data quality assurance, AI and machine learning tools may help to improve macro prudential surveillance by automatically detecting potential mistakes and alerting the data source.

    3. AI for surveillance and fraud detection

    Artificial Intelligence (AI) can be used to spot complicated patterns and questionable transactions that require further examination. AI may be used to analyze granular data from transactions, client profiles, and a range of unstructured data when combined with machine learning algorithms.

    It can also help institutions detect non-linear correlations between distinct traits and entities, as well as potentially intricate money-laundering behavior patterns.

    4. AI for knowing the customer

    One of the biggest challenges faced by banking and financial services in terms of both customer experience and regulator demands is the Know Your Customer (KYC) process.

    During remote KYC, AI can assist financial services organizations in performing identification and background checks. It can also help in determining whether the photos in identifying documents match each other.

    5. AI for systemic risk identification

    Authorities can use machine learning and natural language processing (NLP) methods to predict and anticipate market volatility, liquidity issues, financial stress, and even unemployment.

    AI may also be used to integrate and compare trading activity data with behavioral data to provide more accurate analysis. Even though many institutions are concerned about ROI, there are a considerable number of institutions that have adopted technological innovation and have experienced substantial returns.

    If your organization is looking to embrace these new technological advancements, join us at the BFSI IT Summit Africa, a one-day virtual conference to learn more about how other institutions are driving digital transformation and re-inventing digital customer experience in the BFSI sector.

    5 Ways COVID-19 is Shifting Consumer Behavior in Banking

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    The pandemic has changed consumer sentiments and banking behavior drastically. These behavioral shifts related to banking activities have forced financial institutions to adapt to digital payments and change their approach too. It has also accelerated digital transformation and probably a permanent change in customer interaction too. This measurable shift in banking behavior has led consumers away from cash and checks.

    How COVID-19 crisis has turned into a wake-up call for the banking sector and transformed consumer behavior in different ways

    1. Daily Banking is changing.

    Consumer interaction has been significantly impacted because many banks have redefined their approach. As the pandemic forced social distancing , consumers were keen to use flexible ways of online and mobile banking. Financial organizations are looking forward to combining creativity and innovation in this evolving digital customer journey with such measures.

    2. Higher need of more flexible transactions

    In the contextualization of digital engagement, consumers are shifting to more flexible, convenient, and faster transactions. In this pandemic, people need more support and flexibility from banks. Hence, banks are accelerating the adoption of subscription-based models of implementation to promote customer-centricity. Even to enable customers faster and safe transactions, banks have enabled using biometrics. Moreover, in some countr ies, they allow activation of the contactless functionality in their ATMs which facilitate seamless transactions and limit physical contact during the pandemic.

    3. Boost in Digital Payments

    While the pandemic gave quite the financial shock for many, at the same time, it enabled people to be prepared to be resilient in the future . Until now, the move to digital payments was steady but subdued. Enter the crisis and digital payments received a big boost and impacted consumer behavior in banking. Many people prefer contactless payment options now more than ever before.

    4. Self-service channels came into force

    Majority of businesses like food courts, tolls, and retailers started encouraging cashless transactions, thus allowing consumers to perform their transactions faster and securely. With the evolving digital customer journey, banks started to invest in self-service channels. The implementation of next-generation ATMs and Self-service kiosks came into force. With a wide range of services and payment options, Self-checkout and self-shopping devices made everyday life easier. Thus, we saw a great shift in the banking sector which brought up the opportunity to enjoy the consistency of innovative digital services.

    5. Responsible banking became the new norm.

    Contributing and enhancing the smooth transition, the latest trends of banking even impacted the consumers purchasing decisions. Enabling basic human interaction features, financial institutions fairly shifted and adapted to evolving consumer behavior. Consumers preferred ethical and transparent services from banks and banking organizations made it possible with stimulus measures.

    Conclusion

    Shifting consumer behavior in banking and Digital Transformation is quickly becoming the number one priority for businesses in this sector; they need to embrace this change and become habitual to new norms. The shift to digital banking and digital payments has given financial institutions opportunities to reduce their manual tasks and operations, leverage new technologies, and adjust to these changes.

    5 Key Drivers of Digital Banking in 2021

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    Today’s banking sector is witnessing a significant change consisting of an evolving workforce and an accelerated adoption of technologies in business processes. With the digital environment encircling the financial sector, banking services and consumers are expected to go fully digital. As customer demands continue to disrupt functions, the banking sector is keen on adopting agile practices.

    Here are some key drivers of Digital Banking that can enhance the Digital Customer Journey

    APIs in Banking Ecosystem

    Application programming interfaces will be one of the essential key factors to lead financial institutions to connect with other banking sources. In addition, it may help to deliver a broad range of new services to the public. By unleashing this opportunity in the banking ecosystem, the future of digital banking looks bright as it could help deliver real-time solutions and channel sources of revenue.

    Frictionless Payment Options

    Offering frictionless payment options can also drive the traditional banking system and bring flexibility in payment solutions. This complete revamp in payment options can boost digital banking and thereby enhance the overall customer experience. The payment transfer will be swift, secure, and will be contact less. Such measures will help digital banking in 2021 allow institutions to create virtual versions of their physical credit and debit cards.

    Chatbots and virtual assistants

    The latest and the newest ones in this list to drive digital banking will be Chatbots and virtual assistants. Powered by artificial intelligence, the future of digital banking will be fully automated. These smart assistants may serve the purpose in every vertical of marketing, from customer support to sales, and deliver efficient, personalized services at a minimum cost. With such capabilities, AI will undoubtedly be a game-changer and streamline banking procedures in a significant way.

    Omnichannel service

    With a need to satisfy digitally savvy customers and streamline their services, financial enterprises are crafting an omnichannel experience for customers . Owing to unsustainable organizational and operational divisions, they will try to connect the touchpoints to ease the flow of information across channels to ensure that customer interaction isn’t broken. With such tailored banking interactions over the channel, they will deliver their customers with a uniform and integrated experience across all channels.

    Digital integrations

    Going digital makes customers’ lives easy and implementing digital integration in the banking sector can provide security and cost-efficiency. In addition, this driver of digital banking can ensure the smoothest workflow and the highest quality service across all bank locations. Going digital can also serve to manage services of opening a savings account remotely or setting up automatic payments anytime and anywhere.

    Conclusion

    To ride this digital wave successfully and prepare for Digital Transformation, every financial institution and bank needs to take immediate steps. First, they need to usher in this trend with a strategic mix of automation, experimentation, and analytics. Then, they should decisively switch gears before they lose touch with their customers and adapt to serve digitally savvy and mobile customers. Witness the rapidly advancing digital banking landscape escalation and enable your enterprises to grow better than ever.