Digital technology adoption and innovation are crucial for firms to stay competitive in the banking, financial services, and insurance (BFSI) industry.
Institutions are embracing boundaryless innovation and collaboration through methods such as hybrid or multi-cloud adaptability, B2B interaction, software as a service (SaaS) collaboration platform integration, and edge computing to tackle business challenges and enhance customer collaboration. At the same time, the idea of a safe network security perimeter is fading, giving rise to the necessity for a composable, flexible, resilient, and scalable security mesh ecosystem.
The widespread adoption of digital processes, technologies, and customer channels has expanded the IT perimeter and complicated the security architecture of financial organizations. This has led to an increase in cybersecurity threats such as data breaches, fraudulent activities, and ransomware attacks, resulting in significant financial losses. In 2022, an American commercial bank failed to protect the personal data of its customers, leading to a lawsuit. Similarly, in 2021, a US-based insurance company, a major US insurance company, suffered a ransomware attack and was required to pay $40 million to regain data and network control.
Several surveys indicate that over 50% of financial services organizations experienced at least one ransomware attack in 2021, and these numbers are expected to multiply annually. Consequently, composable security has become crucial for addressing integration patterns and IT threats. The cybersecurity mesh model’s defense mechanism provides strong security by allowing for easy adaptability through modularity. Here are some elements of the model.
Smart identity management
The distributed identity fabric has replaced centralized user authentication with multi-factor authentication (MFA).
This has strengthened security for banks and capital market firms. It has also enabled identity management across multi-cloud platforms, streamlining identity access management (IAM) for financial institutions and mitigating fraud risks in transactions. Several banks have adopted the distributed identity fabric to enhance security measures and protect customers’ data during online transactions. For instance, a multinational financial services provider based in the US has implemented MFA using biometric factors such as fingerprints and facial recognition, in addition to passwords, to authenticate its users and strengthen identity management
Zero trust security
The backbone of the cybersecurity mesh is the zero trust security principle.
It is a framework that assumes no constant network perimeter, allowing for local, hybrid, multi-cloud, or on-premise networks. A composable cybersecurity mesh model with zero trust is essential for modern organizations. Banking and financial services customers across the globe are embracing multi-cloud platforms to access the best services from various providers, leading to a rapid adoption of the zero trust security framework. a Dutch banking giant recently collaborated with Microsoft and HashiCorp to implement the zero trust security framework to enhance security within its organization.