Challenges faced by the BFSI sector.

CIOReview Team | Wednesday, 20 May 2015, 07:32 IST

Banks in India are different from other countries, because they have a large branch network and diverse needs specific to regions and customers, signifying the importance of highly customized technologies. But the concern when implementing complex technologies is safety and security. Of the list of the top challenges faced by the banking sector, the following might be in the forefront:

1. Cloud Computing:
When a bank adopts cloud computing, the confidentiality and security of commercial and Personal data and applications is paramount. Security breach is out of question. One main aspect that the banks should focus is, if in case important data is lost, can the cloud provider restore the data completely. Because users, who use the cloud, don’t know about the hosted data and since cloud is typically in a shared environment there is a danger of data loss. Also, In case of a security breach, Cloud technology services are difficult to investigate, because logging and data for multiple customers may be co-located and may also be spread across an ever-changing set of hosts and data centers.

2. Mobile Banking risks:
Millions of consumers are already using a wide range of mobile devices to conduct banking for its ease of access. But with that come a whole set of threats: mobile malware, third-party apps, unsecured Wi-Fi networks etc. Consumers love their smart phone and tablet applications most of which could be created by fraudsters and loaded with malware.

3. Phishing-
Phishing takes place either through phone calls, emails, or fake websites. Customers reuse usernames and passwords for multiple online sites and accounts. There is a high probability that the username and password combination once compromised can be used by fraudsters to log in to legitimate websites.

4. Automated Clearing House Fraud.
ACH fraud is any unauthorized funds transfer that occurs in a bank account. And, it is easy to execute. All the fraudster needs is an account number and a bank routing number to execute the fraud. It begins with a computer Trojan that fraudsters place on a computer, through some type of "phishing" attack.

In this dynamic world, where the banking basics are evolving, banks need to invest in cutting edge technology and innovation while ensuring their core infrastructures offer the right foundation for real organic growth and expanded customer wallet share.

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