By Ouliana Smith, Head of Content at WealthInsight
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Industry collaborations seem to be the most robust way to combat the emergence of new methods of financial crime that have created challenges for regulators, institutions and technology firms alike.
Adopting appropriate security measures and systems as well greater industry collaboration have become crucial to ensuring clients’ data protection and trust. To ensure the same, financial institutions now require significant improvements in their overall IT infrastructures. Moreover, new and increasingly complex financial crimes require advanced anti money laundering (AML) solutions, prompting private banks to build stronger technology strategies.
In December 2016, the Monetary Authority of Singapore (MAS) and the Financial Services Sharing and Analysis Center (FS-ISAC) announced plans to launch a new centre dedicated to cyber security risk management. The launch, which is anticipated in mid 2017, is unsurprising given that cybercrime is a key concern among banks worldwide.
The new FS-ISAC centre will employ local analysts to monitor cybercrime, offer analysis and recommend solutions to bolster financial institutions’ cyber security risk management and promote innovation in cyber security in Asia Pacific region.
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By GlobalDataTo date, global national bodies, regulators and governments have been active in addressing the threat of cybercrime, which is estimated to cost the global economy US$560bn a year. For instance, a UK-based trade association of the investment industry, the Wealth Management Association, collaborated with the National Crime Agency to support wealth managers in preventing cybercrime. During 2015 the two organisations created documents to educate wealth management firms on cyber threat.
To prevent cybercrime and other activities such as digital currency money laundering, financial institutions are moving towards adopting more sophisticated AML infrastructure. They are working to understand the risks and build it into their enterprise risk management frameworks and procedures. A number of IT companies also provide solutions to track sophisticated financial crime including threat analytics, managed security services, cyber defence and digital transformation advice to offer full protection of an organisation’s digital assets.
Faced with a weak macroeconomic environment and pressures from growing compliance requirements and emerging threats, institutions are seeking to use technology not only to curb financial crime but also increase efficiency, cut costs, and achieve synergies and standardisation. As a result, solutions are emerging to address the complete client lifecycle management across different business lines.
Risk and data management is an area that private banks particularly have traditionally wanted to keep in-house. However, those banks that continue to have legacy IT infrastructure will be exposing themselves to greater vulnerability.
