By Anurag Lal, President and CEO of NetSfere
Securing business communication in the financial services industry is now more than ever a bottom-line issue. That’s because unsecure business communication creates massive business risk for the highly regulated financial sector. Mounting fines for compliance violations, hefty costs associated with data breaches and significant reputational damage are just some of the costly consequences that result when financial institutions don’t lock down business communication.
Digital transformation, bring your own device (BYOD) practices and hybrid and remote working are expanding the cyberattack surface, introducing compliance and data security risks in enterprises across sectors. The use of consumer-grade messaging apps like WhatsApp along with widely used collaboration platforms such as Slack and Microsoft Teams are intensifying these risks.
Recent regulatory actions against banks for the misuse of messaging apps serve as a cautionary tale that highlights the importance of securing business communication with enterprise-grade mobile messaging and collaboration platforms.
Last year, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) fined major Wall Street banks and brokerages a collective $1.8 billion dollars for the misuse of messaging apps. This enforcement action reflects increasing concern among regulators over the use of unsanctioned communication apps.
Financial institutions are also grappling with growing data security risks associated with messaging apps and collaboration tools. As repositories of lucrative personal data such as account data, credit card information and social security numbers, banks are prime targets for cyber criminals.
According to the latest EY and Institute of International Finance (IIF) bank risk management survey, cybersecurity is at the top of the list of near-term risks for banks around the world. The survey revealed that 72% of chief risk officers (CROs) identified cybersecurity risk as their top concern over the next 12 months.
CROs have good reason to be concerned as cyberattacks continue to grow in sophistication and frequency. A recent report by Contrast Security found that 60% of financial institutions have been victimized by destructive cyberattacks. Cyberattacks that result in data breaches are costly for financial institutions, reaching an average cost of $5.97 million in 2022 up from $5.72 million in 2021.
As the use of consumer-grade messaging apps and unsecure collaboration tools continues to compromise compliance and data security, mobile messaging and collaboration solutions designed to lock down business communication become vital to protecting the bottom line.
To ensure compliance and data security, financial institutions should look for mobile messaging solutions that provide:
Security by design and default
Financial institutions need mobile messaging and collaboration tools that are built from the ground up with enterprise-grade security and don’t require any configuration to activate that security. Always-on end-to-end encryption (E2EE) encrypts messages and data at rest and in transit across all devices and channels. E2EE provides iron clad protection, safeguarding sensitive information and privacy and locking down data to help financial institutions meet compliance requirements, and ensure proper data governance.
IT control
To achieve information security, regulatory compliance and bottom-line business improvement, banks should adopt mobile messaging technology equipped with a slate of administrative controls for managing users, monitoring activity and enforcing corporate policies. Mobile messaging platforms with robust administrative, technical and physical data security features make it easy for financial institutions to meet compliance requirements such as Sarbanes-Oxley, Dodd-Frank, FINRA and future-proof business communication to meet evolving global data privacy requirements.
Compliance guaranteed
Non-compliant mobile messaging and collaboration tools can elevate risk for banks. As compliance laws continue to evolve, financial institutions should adopt mobile messaging technology with built-in technical safeguards and security that guarantee compliance. To ensure compliance, financial institutions should also look for a collaboration solution provider that never collects or shares data.
Ease of use
Right-fit mobile messaging and collaboration platforms for financial institutions are designed to be easy to use without compromising compliance and data security. Providing employees with easy-to-use all-in-one platforms that allow them to securely communicate and collaborate across preferred channels – text, video and voice – will help eliminate the use of risky consumer-grade communication apps and unsecure collaboration tools.
Business communication is now a bottom-line issue for financial institutions. As non-compliance fines continue to increase and the cost of data breaches continue to rise, financial institutions today simply can’t afford compliance and data security risks. It’s a billion-dollar problem that can be mitigated by adopting secure by design and secure by default mobile messaging and collaboration technology.
About the Author
Anurag Lal is the President and CEO of NetSfere. With more than 25 years of experience in technology, cybersecurity, ransomware, broadband and mobile security services, Anurag leads a team of talented innovators who are creating secure and trusted enterprise-grade workplace communication technology to equip the enterprise with world-class secure communication solutions. Lal is an expert on global cybersecurity innovations, policies, and risks.
Previously Lal was appointed by the Obama administration to serve as Director of the U.S. National Broadband Task Force. His resume includes time at Meru, iPass, British Telecom and Sprint in leadership positions. Lal has received various industry accolades including recognition by the Wireless Broadband Industry Alliance in the U.K. Lal holds a B.A. in Economics from Delhi University and is based in Washington, D.C.