Whilst the main virus we have all been concerned about this year is COVID19, the financial services industry has also been targeted by viruses from hackers trying to compromise security of data, especially since companies with trading services have been required to ask their employees to work from home, creating its own challenges. In light of this, COVID19 has increased the risks associated with cybersecurity and the safety of the fintech ecosystem.
However, at the same time, the pandemic has been a catalyst for the digitalisation of the financial services industry. Regulators have responded to this shift by reviewing in anti-money laundering (AML) regulation and updating their know-your-customer (KYC) strategies. Whilst investing in these areas are positive, it is also critical for regulators to ensure the health of their cybersecurity systems.
Globally, financial regulators have identified cyber threats as the primary risk to the financial sector (TechMonitor). According to the World Bank and the Cambridge Centre for Alternative Finance (CCAF), 78% of regulators have identified cyber risks among the top three risks that have been increased due to the pandemic. The report further explains that throughout the duration of the pandemic so far, fintech companies have seen cybersecurity threats increase by 15%. It is crucial for regulators to consolidate frameworks and redefine their policies in this area. With greater digitalisation and access for teams to work remotely, comes greater risk. BCP’s are being rewritten or at the very least, reviewed.
Ensuring that trader surveillance is uninterrupted is key
Alongside updating policy, another important area for regulators is trader surveillance. In line with regulation rules, it is a requirement that calls taken by traders are recorded and monitored. Yet, with more and more traders working from home, calls have gone unrecorded. Work is being done behind the scenes by firms to create a satellite office or hybrid working environment that works for all. As we move towards a post COVID19 recovery, identifying solutions to these problems will be key.
In a climate of lockdowns and a goal to minimise cyber risk, banks are now working on developing and offering self-service options for clients when it comes to wealth management, trades and financial lending. As this kind of customer service becomes the new normal, ensuring robust cybersecurity controls is imperative.
The UK is now under a second national lockdown and Linear’s staff are adhering to government guidelines and working from home. However, as a company, we are aware of the risks and vulnerabilities associated with a second national lockdown and how cyber criminals are exploiting the vulnerabilities. As a forward thinking technology savvy business, when the COVID 19 news broke, we were able to implement our BCP, keep all of our staff safe and also achieve an uninterrupted business flow. As the pandemic continues, we have the opportunity to look at a longer term solution for flexible satellite office working. We are confident our solutions are robust as we enter a new period of professional financial services.
If you would like to know more about Linear Investments, please visit www.linearinvestement.com