While cyber crimes are a reality that cyber professionals in the financial sector have had to and will continue to live with, bank fraud teams have long been focusing on analysing instances of fraud after they happened. There is however now growing momentum for financial institutions to take a more proactive approach to preventing cyber threats before they can take hold.

In this podcast, Dr. Trevor Human, Director of Professional Services at HID Global, joins FStech Editor Jonathan Easton to discuss how financial institutions can be proactive in their approach and how can they prevent cyber attacks on their infrastructure.

There are a number of key challenges facing organisations looking to establish themselves as digital leaders in the financial sector, but fundamentally it boils down to two key factors: technology, and mindset.

The first is a question of how FSIs can excel and exploit the opportunities in the market if you don't have the right equipment. The second comes down to a wider shift in approach and attitudes to truly disrupt the market.

In this podcast, FStech Editor Jonathan Easton and Hector Arias, Banking Sector Global Lead, at enterprise open source software leader Red Hat discuss the findings of company's recently published report, Evolving Opportunities for Digital Leaders in Financial Services, and how FSIs can champion innovation in the industry.

Financial Services organisations are expanding their services and moving an increasing number of vital applications to the cloud.

Almost half of FSIs use a multi-cloud strategy, using an average of three cloud providers, and this number is set to rise.

At the same time, the regulators want to add a layer of protection. The European Union's incoming Digital Operational Resilience Act, or DORA, aims to improve the digital resiliency of the entire financial system.

To delve further into these challenges and find possible solutions for FSIs, FStech was joined by Armin Warda Chief Technologist FSI - EMEA at Red Hat.

The podcast looked at how FSIs can overcome issues that prevent them satisfying consumer expectations and the demands of regulators.

In mid-2021, UK Finance revealed that banking customers in the country lost a record 1.3 billion pounds in 2021 to cyber fraud, arguing that the country is experiencing an 'epidemic of fraud' and that 'collaborative action' is required in order to regain control.

Not even the government is insulated from this-it admitted that as much as 4.9 billion pounds of the 47 billion pounds lent by banks to 1.1 million companies between May 2020 and March 2021 as a part of the government's Bounce Back Loan programme was lost to fraudsters.

To cover the regulations and technologies being deployed to combat fraud, FStech was joined by Chen Kirsch, Senior Business Consultant at Nice Actimize.

On the podcast, Chen Kirsch and host Jonathan Easton discussed whether measures like Confirmation of Payee (CoP) will reduce the fraud and scam risks associated with Authorised Push Payments (APP). There are concerted efforts to help with APP risks and all aspects of financial controls are currently being reviewed. Controls like fraud technology, fraud prevention regulations focused on consumers and financial institutions, and the role third-parties can play in combatting cybercrime in the financial sector.

The shift to cloud in financial services is now well underway, with large institutions at various stages of their cloud journey in a bid to keep up with the rapid digitization of products and services, and the need to access and leverage data from multiple locations.

However, for most firms what they have done so far is only the tip of the iceberg in terms of the potential of cloud to transform businesses.

To examine the next big leap in cloud, FStech was joined by Anubhav Mehrotra, Head of Financial Services, UK & Ireland at HCL Technologies.

The podcast covered how financial services providers are planning to leverage the full value of cloud technology for the next phase of company-wide digital transformation as well as key strategies for dealing with a growing list of challenges from changing regulatory requirements, to legacy systems and skills shortages.

For many financial services institutions (FSIs), data is a critical part of their operations. However, the millions of accrued datapoints that traditional finance institutions hold are only as valuable as they are accessible.

For traditional FSIs, accessibility is often a sticking point. All too often, useful data that could be meaningfully deployed is stored in legacy data repositories and is therefore difficult to access in an efficient manner. FinTechs, deployed with digital-first in mind at the outset, are generally not faced with this issue.

Data streaming can overhaul existing infrastructure and harness data so it is available on-demand as organisations require it. Beyond accessibility, a data streaming solution has the potential to analyse data in new and innovative ways which can add greater value from the front to the back office of an organisation.

During this podcast, FStech was joined by Peter Pugh-Jones, part of the financial industries team at Confluent, to talk us through the way in which a data streaming solution can leverage and apply data in ways the result in quick, improved decision-making and help realise insights that enrich the customer experience.

Compliance teams in financial services companies are currently battling a perfect storm of new and complex challenges; a rise in global regulatory action combined with new sanctions on entities and individuals following Russia's invasion of Ukraine has led to an exponential increase in workload for employees.

Alongside this, employees are also shouldering the burden of staff shortages as financial services firms battle for specialised talent with big tech companies in the era of the Great Resignation, all while firms look to tighten their belts to cope with rising inflation and costs.

As a result, compliance teams are experiencing burnout, overwhelm and exhaustion, pushing them to seek out other opportunities and compounding the problem for managers.

To combat these challenges and free up staff time for value-add tasks, some FS firms are exploring the potential of AI-driven digital workers. This highly specialised digital workforce is being used to replicate many of the more manual and process-based tasks performed by sanctions teams, with avatars functioning as hyper-efficient members of the team. FS firms are also using these digital workers to scale flexibly at peak times and reduce capacity or virtual headcount in a responsible way if demand falls.

During this podcast, FStech was joined by Daniel Hazel, Global Head of CLM at WorkFusion to talk us through the role that digital workers can play in lightening the load on an overstretched sanctions workforce.

There has never been a time when FS firms didn't have to deal with monitoring illicit employee communications. But the introduction of ever more channels of communication, with new apps appearing seemingly every month, means there are more ways than ever for mishaps - and malicious activity - to fall under the radar.

Organisations now need to shift through unprecedented volumes of metadata to pick up on "signals" which can indicate compliance infractions. Particularly as evolving data protection and data privacy regulations in the UK, the US, and Europe mean that the potential negatives of non-compliance are higher than ever before.

As a result, many firms are turning towards AI and machine learning to sift through their metadata, and to pick up on valuable signals that can save their firms from potential disaster.

To delve further into these challenges as well as some possible solutions, FStech was joined by Shaun Hurst, Principal Regulatory Advisor and Dr Kevin Keenan, Senior Director of Data Science at Smarsh.

Research shows that organisations with compromised user credentials (normally through data breach) are many times more likely to fall victim to a ransomware attack. And when you consider that the rate of ransomware attacks has more than doubled in the past year, it's no wonder that the cost of cyber liability insurance - which is designed to support a business in the event of an attack or a breach - has risen exponentially in the last year.

Many insurance providers now expect to have visibility of a network's data security and potential vulnerabilities before they are able to assess risk and make an accurate quote for coverage. And with the cost of coverage reaching tens of thousands of pounds per year depending on an organisation's size and cyber risk exposure, financial services providers are under growing pressure to prove to insurers that they have the right authentication, controls, and oversight to stop the bad actors at the front door - or risk hefty premiums.

In addition, failure to arrange the right cyber liability coverage can leave FSIs either overcharged or dangerously exposed to the financial and reputational consequences of a successful cyber attack, meaning an ounce of prevention in this case is worth far more than a few pounds of cure.

During this podcast FStech was joined by Richard Archdeacon, advisory CISO at Duo, now part of Cisco, to delve further into these challenges. Specifically, Richard explores who should be responsible for cyber oversight, what insurers are looking for when it comes to weighing up the cost of a cyber-attack, and what financial institutions should have in place before they even begin talking to an insurer for cover.

The face of fraud is changing. Whether you look to the rise of romance scams, purchase scams, or the emergence of new types of crypto and investment fraud, novel strands and variants are emerging almost every day. And with many UK workers still working remotely, cybercriminals are taking advantage of the increased attack surface which the shift to remote working can offer.

Though financial institutions have taken steps to stem the growth of fraud, including the introduction of Confirmation of Payee (CoP), these steps haven't been enough to impede its growth.

As part of efforts to stop fraud, companies are turning towards data analytics, blending a combination of data from different sources, as well as leveraging the power of AI and machine learning (ML) to pick up on suspicious activity. This is helping to inform their efforts as they fight Authorised Push Payment fraud and scams, customer account takeover attempts, card fraud, and money mule activity.

To discuss these challenges, as well as some possible solutions, Will McCurdy, Content Editor of FStech spoke to Freddy Arthur, Fraud Strategy Leader for EMEA at NICE Actimize.