The importance of personal data protection in banking

For customers, a cyberattack can have serious repercussions, including identity theft, financial fraud, or money transfer scams. For institutions, this means a major headache, as it entails significant fines and the loss of users’ trust. Especially if we take into account that cyber attacks are increasingly sophisticated.

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Fortunately, there are plenty of technologies that can help the banking industry protect itself from threats. Nowadays it is common to authenticate customers and stop fraud through biometrics, using facial and voice recognition. In addition, it is possible to detect suspicious behavior patterns and fraudulent activities using anomaly detection systems in writing patterns or consumption habits, many of them based on machine learning technologies and Big Data analytics.

Several articles have highlighted that the use of blockchain technology can increase the security of banking information by offering a decentralized database that is resistant to tampering. The Sovrin Foundation is a clear example. This non-profit organization builds a decentralized unique identity network where people can create and manage their own digital identities through the network. It is also used to securely verify identity in various financial services.

Accenture also recommends AI and process automation as tools that can help banks improve the security and efficiency of personal data management. According to the study, 93% of senior executives say they are aware that their sector will suffer major disruptions in the next five years, but…

Only 20% consider themselves prepared to face it.

Óscar Barba

Co-founder & CTO of Coinscrap Finance

The latest innovations in security solutions for the digital banking industry are designed to both enhance customer experience and security. Since the use of Apps have increased to carry out our transactions, entities need to invest more and more in them.

Here I leave you the 7 technological trends that are transforming the financial landscape for the better.

Secure connection to a website certifications 

Despite the fact that we are already used to surfing the net and also very aware of its risks, the police continue to report cases of phishing. It is very important not to click on links of dubious origin that redirect us to websites with the appearance of our online banking, but which are totally fraudulent. That’s how our keys are in jeopardy. Banks implement certification tools on their platforms to help customers steer clear of these tricks. 

This is the case of secure sockets layer digital certificates (SSL and the subsequent TLS), which guarantee the authenticity of websites and protect users. Currently, many mail service providers, for example, are beginning to restrict the use of versions lower than TLS 1.2, thus forcing users to update applications and raise the level of security.

Artificial intelligence and machine learning to detect fraud

On the Backend, the use of Artificial Intelligence and machine learning helps the financial sector detect anomalies and suspicious transactions in real time. Thanks to the analysis of massive amounts of information at high speed, these tools have the necessary resources to detect the differences between real and false customers, as well as guarantee the authenticity of payment methods or the veracity of transfer orders or access to services.

Its agility and effectiveness have made this technology a guarantee for the detection of computer fraud, since it captures anomalies in an ultra-efficient way.

Large-scale bank data encryption systems

Banks use different encryption algorithms to shield their systems. They have AES (Advanced Encryption Standard), which is used to encrypt data in transit and at rest. Full disk encryption solutions are also commonly used to protect data stored by entities. Another option is to use public and private key techniques, known as asymmetric cryptography.

These techniques use a key pair to encrypt and decrypt data. According to an article in Infosecurity Magazine, homomorphic encryption is gaining ground, allowing applications to perform calculations on encrypted data without having to decrypt it. This could represent an important advance in the security of bank data.

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The importance of cloud computing security

As more and more companies migrate their systems and data to the cloud. It is imperative to protect against external threats such as hackers and malware. Constant monitoring solutions ensure that data is secure against unauthorized access or information leaks. In these cases, encryption also becomes essential. As well as the implementation of physical security measures to protect data centers and servers that hold that data. It is common to implement multi-factor authentication (MFA), a technique that uses several authentication steps to verify the user’s identity before granting access to information.

Usually the use of dynamic codes via SMS, tools such as Google or Microsoft Authenticator, among others, support the use of a second factor for authentication, minimizing illegitimate access, which is the main concern in cloud services. The platforms that provide cloud hosting also have security certifications such as PCI, ISO27001, CSA, Cyber GRX… and high level agreements regarding service, which generates trust for customers.

“At Coinscrap Finance we are committed to the security of our clients and their users, which is why we are ISO 27001 security certified.”

Óscar Barba

Monitor the online account opening procedure

Due to the pandemic, the remote opening of bank accounts has skyrocketed. In addition to biometric technology, the use of two-factor authentication (2FA) has also spread, to protect confidential customer information during the process. The user must provide a second form of authentication (such as an application-generated code sent to their mobile phone) before they can access online banking.

Banks implement end-to-end encryption in these account opening processes to encourage customers to open an account without having to visit a physical office.

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API (application programming interface) implementation

This software provides a more secure and efficient way of exchanging data between banking and third party systems. APIs are becoming a key growth driver in the B2B banking segment. They allow seamless integration with third-party solutions, maintaining the entity’s look & feel at all times. Additionally, by sharing only necessary information with authorized third parties, the risk of security breaches is reduced.

Token-based authentication can also be used, where users provide a specific token to access the system. To further reduce the risk of unauthorized access, tokens are generated by banking systems and are only valid for a limited period of time.

The future of security in the banking sector

Banks continue to improve and update their protection systems, such as firewalls and anti-malware programs. In order for all their efforts to bear fruit. It is necessary to make users aware of the importance of verifying the veracity of the communications they receive. As well as educate them on cybercrime. Both authorities, entities and institutions have the duty to protect citizens against any threat. A safe experience is a satisfactory experience that gives us a feeling of reliability and improves our customer journey.

It is to be hoped that entities will adopt a more collaborative approach in the fight against cybercrime, working together with other financial institutions, regulators and public bodies to share information on security threats and improve defenses. Investment in technology will continue to increase to ensure active protection of citizens. And that is where advanced data analysis is going to play a fundamental role in improving systems.

About the Autor

Óscar Barba is co-founder and CTO of Coinscrap Finance. He is an expert Scrum Manager with more than 6 years of experience in the collection and semantic analysis of data in the financial sector, classification of bank transactions, deep learning applied to stock market sentiment analysis systems and the measurement of the carbon footprint associated with transactional data. 

With extensive experience in the banking and insurance sector, Óscar is finishing his PhD in Information Technology right now. He is an Engineer and Master in Computer Engineering from the University of Vigo and Master in Electronic Commerce from the University of Salamanca. In addition, Scrum Manager and Project Management Certificate from the CNTG, SOA Architecture and Web Services Certificate from the University of Salamanca and more.

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