One for the board: aligning cyber resilience and digital transformationBy Steve Coakley,
Part one of a two part analysis
Read on for great shared-learning for Irish-headquartered multinationals
In UK-based financial services organisations, security is often seen as an obstacle on the path to digital transformation. In 2017, 71% of financial institutions cited cybersecurity as the biggest risk associated with collaborating with fintech firms, in a nod to its widespread perception as an impediment to innovation. The concern is understandable; while financial institutions have upped the ante in protecting themselves, cyber criminals show no sign of slowing down and are relentlessly trying to outsmart their targets by employing ever more refined tactics.
Cybercrime has overtaken traditional crime
The threat is pervasive: in the UK alone, cybercrime has overtaken traditional forms of crime, with attacks becoming increasingly sophisticated. The Office of national Statistics found that over half of fraud incidents reported from 2016-2017 were cyber related, costing organisations an average of US$11.7 million*. Cyber threat was a top priority for world leaders at Davos** this year, reflecting a growing understanding that attacks are indiscriminate and organisations become collateral damage.
Moreover, research by BT revealed that when it comes to achieving their digital ambitions, 20 per cent of CEOs in the financial services industry view cybersecurity measures as a necessary evil, while more than 50% of them regard it as a key differentiator. The same report showed that while CEOs believe perceived security risks should not hold back their digital transformation progress, they nevertheless continue to view security as one of the chief barriers and concerns when considering a digital strategy.
Cybersecurity is fundamental to profitability
Yet, when company boards grasp cybersecurity’s fundamental importance to their safety and profitability, financial services firms can steal a march on their competition and use it as a true differentiator as customers increasingly recognise the value of a digital bank which upholds rigorous cybersecurity standards. In fact, regulators recognise this too, as British businesses lacking sufficient cybersecurity measures in certain industries will soon face fines of up to £17 million, demonstrating the crucial importance of implementing a robust cyber defence strategy from the top down.
Varied connectivity increases the attack surface
Digital transformation, however, does not always fit with such strategies so effortlessly. For example, the increasing adoption of software defined networks (SDNs) and cloud-based applications act as a catalyst for digital transformation in financial services, with 35% of CEOs citing cloud computing as the digital technology trend that will have the most significance for their company over the next 2-3 years. But these technologies pose challenges to cyber defences due to the hybrid, or ‘cut-and-stick’ way in which they have been implemented. Organisations now have a complex infrastructure that’s difficult to protect, with a large number of varied devices and network connectivity elements. As a result, attackers have more windows, doors and tunnels through which they can strike.
The changing nature of networks and new technology means that security will be transformed. Malicious actors are more sophisticated but the defence is also increasingly sophisticated.
Visit us here at www.btireland.com/dyns and download our whitepaper ‘The CISO and CIO’s guide to securing networks in a digital age’ in which we outline how security will become a key component of your future network strategy.
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*Cost of cybercrime, 2017, Ponemon Institute
** Global Risks Report, 2018, World Economic Forum