By Matthew Finnegan
Jan. 3, 2017
In the UK it was Tesco Bank that grabbed the headlines as criminals stole £2.5 million from 9,000 current accounts in what CEO Benny Higgins described as "a systematic, sophisticated attack" that was "unprecedented" in the UK. It is unclear precisely how the hack was carried out, but the incident served to highlight the vulnerability of the banking sector and raise concerns with the UK's regulatory body, the Financial Conduct Authority.
According to Fujitsu's Director of Retail Banking at Fujitsu UK & Ireland, Anthony Duffy, cybercrime is a top priority for financial institution directors and there is awareness that the threat is only set to increase. "Perhaps the number one preoccupation of financial institution directors with whom Fujitsu speaks is cybercrime," says Duffy. "They know that this form of criminal activity is on the rise and of the importance of always being at least one step ahead."
Despite increased investment in prevention, the likelihood of more successful attacks next year which will encourage better information-sharing between lenders, as suggested by the global messaging system provider, SWIFT. "Such initiatives would also follow the example already set by eight of the largest American banks, who have agreed to share information with each other about threats, work together to develop and deploy comprehensive responses for when attacks occur and to conduct appropriate 'war games'".
Cloud computing will drive efficiencies and support delivery of new services
The financial sector has been one of the slowest to adopt public cloud computing - understandable given the tightly regulated nature of the industry. But with the publication of the Financial Conduct Authority's cloud guidance earlier this year, there are now fewer barriers in place.
While modernisation and management of legacy infrastructure remain a focus for most large banks, cloud computing will help develop and deploy new digital services faster as they compete with smaller and more agile fintech firms.
Many banks have been using software as a service tools, such as Salesforce and ServiceNow, for years now. But infrastructure as a service is increasingly becoming an option to build customer-facing applications and even to host core systems for smaller firms. During 2016 public cloud giant Amazon Web Services announced that newcomers Monzo and OakNorth are using its services in the UK, while HSBC is relying on AWS for mobile app development. JP Morgan and Capital One are among the large established US lenders working with AWS, alongside BBVA in Spain.
And with IBM, Microsoft and Google all setting up cloud data centres within the UK too, some of the concerns around data sovereignty are disappearing and providing banks with more choice.
According to IDC analysts, cloud adoption in the financial sector is increasingly common. By the end of next year "at least 65 percent of financial services institutions (FSIs) globally would have already implemented cloud solutions to support production workloads and services beyond just a few non-mission-critical systems".