When I was younger, my father would tell me that the best security for our home was good neighbours. This advice seems particularly relevant to the cybersecurity challenges facing financial institutions today.

Establish New Standards for Digital Identity

Implied in my father’s advice was the idea that our neighbours would notice if anything ‘out of the ordinary’ was happening while we were away. He explained that this was much more effective than adding more locks to our doors or building a higher fence. This idea is embodied in one of the key pillars of the new security model for financial institutions – Establish New Standards for Digital Identity. Most experts agree that an organization’s focus should not be on building higher walls, but making sure the person is who they claim to be. Traditionally, there have been three ways to validate a person’s digital identity:

  • something a person knows (e.g. password)
  • something a person has (access card)
  • something a person is (e.g. biometrics)

However, with new advances in machine learning and predictive analytics a fourth identity ‘factor’ is emerging: something a person does. Imagine an immutable blockchain containing an individual’s digital activity that can be used to identify patterns and anomalies.

Collaborate on defense.

Another key aspect of my father’s advice was the idea that you need to rely on other people for help. Getting to know your neighbours and working together is much more effective than trying to do everything yourself. This idea is embodied in the second pillar of the new security model – Collaborate on defense. Effective cybersecurity solutions require financial institutions to work together. The cost of individually securing your organization’s data will become prohibitively expensive in the near future.

Reposition Value and Risk

The last element of my father’s advice was to not advertise your home as a great target for thieves. Fit in with your neighbours, and don’t make it look like your home is filled with valuable items. This idea is embodied in the third key pillar of the new security model – Reposition Value and Risk. The value of financial institutions is not in holding massive amounts of capital reserves. Instead, the value is in connecting those who have capital with those who need it. By decentralizing financial data with technologies like Blockchain, financial institutions can greatly reduce the potential payoff for cyber criminals.

For more information on rethinking identity and access in banking and capital markets, please read A New Vision of Cyber Security.