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Security in the financial industry

In recent years, there has been a growing realization that privacy is every citizen’s right. What’s also become clear is that you can’t have privacy without security in place. You only need to look at the number of cyber-attacks which have plagued the headlines in recent years to see that companies have been irresponsible to date. No company is immune to today’s cybercriminals, especially financial services companies who process and handle huge amounts of sensitive information. With this in mind, these businesses need to ensure they’re adopting the right technologies to protect themselves from this growing threat.

Encryption is one of the biggest solutions to this problem and is an enabler of modern-day banking and fintech operations. Banks are well-known for using encryption for security reasons. Currently, the biggest challenge facing the finserv sector is around bringing this level of security to the wider industry. Finserv customers want high levels of security but also easy deployment, flexibility, and agility, which often poses a challenge for IT teams. Canonical is working closely with IBM to overcome this issue and provide its fintech customers with the technology to optimize data protection and privacy across both containers and multi-cloud infrastructures.

One such technology is the “secure service container” - a tool which has been specifically developed for container-based applications on IBM’s LinuxONE. Banks and fintechs are already using this technology to protect themselves against three of the most common attack factors: malware, ransomware and memory scraping, as well as other mainstream attack methods used for stealing cryptocurrency, and insider attacks which compromise user credentials.

What is the role of open source in the future of open banking?

By using the mix of hardware and software that the so-called “security service container” offers, developers get the same quality of security that they would on Linux, and this works in any data center, whether on-premise or using cloud services. The next generations of finserv IT infrastructures are being built around Linux because it is easy to deploy, and gives you a highly functional and easily automated stack. Industry giants such as Barclays have already built whole data center infrastructures around Linux. Besides providing easy access to innovations and software frameworks for IT teams, open source software also increases trust, which is essential for security compliance in the long term.

When it comes to close-sourced software, it is impossible to verify all background activities happening, and in case of a bug or an error, it is hard to analyse the reasons behind them, given only the original developer can access the backend. In the case of open source, the community of developers is very quick to spot and fix bugs or errors.

Why is container-based technology key to the future security of the finserv sector?

In the financial services industry, containerization can enable new levels of security, cost saving and developer efficiency. The majority of developers are not security experts but are looking for cost efficiencies when deploying new applications and systems. With containers, you can push a button, move things to the cloud and it will run as a virtual machine. These capabilities are not something developers have traditionally been able to benefit from to provide advanced security through hardware. Even with physical access to computers, cyber criminals won’t be able to break into the system.

What’s the role of cryptography and blockchain in the future of finserv security?

In about 10-15 years quantum computers will become powerful enough to break all current cryptography keys, and the banking and financial industries are preparing for the post-quantum cryptography already. Technology vendors are already populating their systems with such algorithms, moving from firmware into hardware. When quantum computers reach the required level of power, the majority of businesses will need to decrypt all of their data and encrypt it with the new post-quantum cryptographic methods.

In addition, blockchain technology will also become one of the key security algorithms. The goal is to enable the finserv industry to operate, test and run analytics without data. It is also great that new players in the finserv space, who have never had legacy systems in place, will build their infrastructures on non-monolithic systems.

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