We are witnessing frequent changes in the financial services industry. Despite the disruption of new technology in every industry, the financial services industry has been entirely transformed by financial technology. While the operational challenges of keeping customers and remaining competitive will always exist, IT issues are becoming more prevalent in financial services. The financial industry must consider IT, from cybersecurity threats to regulatory changes, when operating in the new tech-driven world.
In financial technology, what has changed?
In 1967, the first automated teller machine was introduced, and online banking was made available in 1983, following which Internet banking began as a popular option in 1998. However, in 2015, the balance tipped. In 2015, mobile banking was used by more people than bank branches. The steady march towards more advanced finance technology, such as AWS-managed services, has been a boon for both consumers and banks, but it has also presented enormous challenges for the financial industry. Even though technology has been overwhelmingly positive for financial services, improving everything from customer engagement and marketing to transaction accuracy and speed, IT issues can cost organisations millions of dollars in lost revenue and fines.
The sudden changes in the financial and banking industries in Australia saw a transition in cloud-managed services with AWS managed services.
How Do Financial IT Issues Affect the Industry?
Digital technology, including cloud managed services, presents a unique opportunity for growth in the financial sector, given today’s data-driven and hacker-filled world. Financial technology faces persistent challenges that change constantly. Financial institution technical officers are responsible for ensuring that the organisation’s IT systems are running smoothly and keeping the following IT issues in mind.
1. Threats to cyberspace
In any comprehensive list of financial IT issues, cybersecurity gets mandatory. Today, the biggest challenge facing financial technology is probably security and risk management with cloud-managed services. Security is a constantly changing landscape of managed security services – hackers are continually coming up with new methods of hacking systems, while new security technologies are always being created.
Regulation agencies still demand managed security services despite these threats. Risk assessment and response deficiencies could result in a company’s rating being downgraded, potentially resulting in costly penalties.
Nevertheless, keeping data secure isn’t easy. Time and money must be invested in the management of data security by the managed service provider. The officers responsible for technology must keep their managed security services up-to-date and always be aware of the latest threats. Unfortunately, many technology executives still feel vulnerable despite this. In one threat report, 90% of financial services IT executives said they felt powerless against data breaches, and 44 had already experienced a breach.
Cybersecurity threats can be attributed to the following sources.
- Threats from Insiders: These are the leading cause of information loss. Unintentional internal threats can also result from poor security awareness, irresponsible browsing, and other concerns. People who are dissatisfied with their jobs may be complicit in breaches creating defaults in the aws managed services of the business.
Financial institutions must create security-pragmatic cultures that allow for efficient and intelligent operations by combatting threats. Managed service providers, aside from preventing employees from making threats, bank employees can be an essential weapon in preventing cyberattacks. Financial technology defence efforts are significantly improved by teaching employees to detect phishing scams and fundamental cybersecurity issues and alerting IT staff to them. Managed services solutions with on-premise training to the banking and financial employees would minimise the extremities.
- Ransomware: Cyber-ransom is a growing threat across the board, affecting every sector, including corporations, government agencies, and private firms. A ransomware attack may put essential operational information behind a paywall until the hacker gets their ransom. Within the first three months of 2016, the company generated $200 million in revenue from ransomware events, according to a CNN report. Technology professionals worry not if their companies will get hacked for ransom but when. So a proper services business model by the managed service providers could act as an immediate solution in the banking and financial services in Australia.
- Antiquated systems: As much as hackers, old systems pose a cybersecurity risk. If your cybersecurity system has not been updated for even a few months, you may be vulnerable to the newest hacking methods. Additionally, old hardware can be dangerous since old computers may not be optimised for the most recent technology, making them weak. As a managed services solution, the managed service providers can build a services business model where the upgrading of the existing IT infrastructure is enrolled.
There is a risk to both the company’s data and the company’s customers’ data if there is a security breach stored in the AWS managed services. In addition to monetary losses, a breach could mean regulatory fines worth millions of dollars. It poses a significant problem for an industry that is less willing to invest in IT issues and professionally managed service providers.
Infrastructural and expert knowledge of IT
The technology-versus-finance mindset persists among many older executives. Even though these two industries rely on each other, this misconception prevails in the industry.
Even though financial services are heavily dependent on security, the industry lacks a good understanding of how technology impacts financial services.
Approximately 57% of the largest 109 banks in the world do not have any board members who have professional technological backgrounds, while only 3% have CEOs with technology backgrounds. There have been many problems caused by the lack of understanding in the financial IT industry, including the following:
- Poor IT infrastructure: Financial organisations often rely on obsolete infrastructure inherited from mergers, acquisitions, and bargain bin purchases. These outdated infrastructures are often vulnerable, and implementing effective programs is much more difficult with such resources and traditional services business models.
Many financial institutions do not want to spend the money needed to upgrade their hardware and software systems to keep up with the modern world. Therefore for awareness and robust IT services, take assistance from the managed services Australia or the managed services provider.
- Budget cuts in IT are usually the first to be made by the board of directors. In light of these constraints, technology officers such as managed services providers must either work within their limitations or fight for their cut.
Those board members who are technologically illiterate are often forced to explain the importance of managed services in Australia to the officers in the former case. The latter case requires managed services providers to keep up with IT staffing, infrastructure management, and modern security tasks within a limited budget.
Cybersecurity and compliance are enhanced with data management tools without significantly impacting the budget. Cost-saving measures such as data pruning may help companies cut costs but do so at the expense of their ability to detect and address security issues once they arise.
When technology officers implement a solution that collects and organises data from all sources and makes it accessible, they have a better chance of identifying and solving technology security issues.
Compliance with regulatory requirements
Managed Security Services and infrastructure are not the only IT challenge the Managed IT Service provider can quickly cure. Regulatory agencies also pose a significant challenge. Financial regulators are meant to protect consumers, but they can be challenging to work with. Governmental and industry regulations are necessary for financial companies to operate, and adhering to the rules can be challenging.
Maintaining compliance with these regulatory entities can be made more accessible with technology. According to the Bank Secrecy Act and anti-money laundering compliance regulations, banks are required to comb through their transactions for possible fraud and report any instances to the government. Automated data collection and analytics allow this process to be done much more efficiently than manual data verification. The services business model for banking and finance in Australia must go digital or transit to AWS-managed services.
Nevertheless, regulatory agencies are increasingly focusing on mandating cybersecurity standards in assistance of managed security services to protect consumers in the financial industry in Australia. Some legislation requires a cybersecurity plan, while others may specify the type of cybersecurity plan that gets used. Even though these new laws were written with good intentions, they caused the managed services provider, MSP, to figure out how to remain compliant with the security issues.
Big data: Managed IT Service in Australia.
Big data in financial services represents both an opportunity and a threat, a properly framed services business model.
Big data provides financial service providers with significant advantages in that they can tap into social media, databases of consumers, and news feeds, collecting consumer data.
As a result, financial institutions can provide better services to their customers based on the data they collect. It is a problem that big data entails unique risks. Big data is criticised by many consumers, who are wary of companies that use it. Big data also takes a lot of time and effort to sort and use, so companies may find it difficult to leverage it. A team of managed services providers msp holding in-depth knowledge and powerful analytical technology must use big data effectively.
Taking the digital leap
Furthermore, banks must remain competitive in the market on top of everything else. Having a mobile app and a digital brand puts you ahead of your competitors in today’s market.
In an age when most people conduct their banking online, mobile platforms are the new norm.
However, the majority of banks are going one step further, aiming their advertising campaigns at digital consumers and targeting digital channels. In other words, you should advertise on social media, use big data, purchase targeted campaigns and implement artificial intelligence.
Although this trend will reduce the cost of brick-and-mortar branches, it will also increase the number of potential clients for any given financial services company.
Nevertheless, maintaining this technology is a challenge. Transforming your brand to a digital one presents the following technological challenges.
- Uptime: Technology officers need to keep track of their networks, ensuring that customers are happy and that systems are available whenever they need them. Nowadays, downtime is more costly than ever, so ensuring maximum uptime is a necessity.
- Manage remote workers: With the decrease in brick-and-mortar locations, remote workers have become more prevalent, requiring secure connections and hardware. Educating employees on proper maintenance and maintaining the safety of each employee is essential.
- Connecting consumers securely: With mobile banking, consumers need to access their information safely and securely. Security and authentication protocols are crucial parts of establishing secure connections.
With brick-and-mortar banks fading from prominence and more digital financial brands joining the fray; we are sure to see more of these issues crop up in the future.
Managed IT services provider for banks and financial institutions – Why choose NSW IT?
Financial services have been greatly affected by technology, and this trend is set to continue. Your financial services business must find a trustworthy technology solution partner, a trustworthy managed services provider, MSP if it wants to stay current with the technological trends in the industry. You can count on NSW IT Support for that, your only and only reliable managed services provider msp.
We at NSWIT Support have the innovative experience which helps in framing necessary services and business models suitable for the banking and finance industries in Australia. We also develop and implement financial technology solutions to deliver your desired results as a managed services Australia. With expert expertise and world-class products, we produce professionally managed IT services for banking and financial clients. Contact us for immediate IT support in Australia.