Why The Future Of Finance Will Be Built On Customer Trust As familiarity and use of new technology increases, the importance of a robust security framework is incontestable, and banking is no exception.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
India's banking sector has been undergoing a seismic shift. The rise of India's digital stack, affordable data, and the social distancing of the pandemic came together to compel consumers to go online, accelerating digital adoption across sectors, particularly in banking. As familiarity and use of new technology increases, the importance of a robust security framework is incontestable, and banking is no exception. A three-pillar strategy, encompassing proactive security measures, threat intelligence, and continuous customer education, is crucial for building trust and mitigating risks.
The first pillar focuses on inherent security features as with great digitalization, comes a greater need for security. Banks must implement end-to-end encryption, secure APIs, and continuous monitoring tools for early threat detection. Technology has democratized access to banking services and dramatically increased convenience as it enables banking to be integrated into the consumer's digital experience. While striving for a seamless user journey by minimizing transaction steps, banks must balance expediency with security.
Unlike sectors like e-commerce, banking cannot aim for a completely frictionless experience as often an additional step to verify, authenticate, or approve can prevent consumers from letting down their guard, approving unwanted payments, or clicking on links without checking all the details. In these cases, adding additional layers like multi-factor authentication, video KYCs, tokenization, device fingerprinting, biometric identification, etc. can help prevent unauthorized access, while measures like dynamically adjusting security layers based on transaction context can help reduce the risk of unwanted breaches.
As the pace of technological progress accelerates and cyber criminals devise more ways to get around defenses, financial institutions need to keep perfecting this balancing act, between setting up guardrails and delivering a smooth customer experience.
Banks are the first line of defense against financial cybercrime, and, therefore, the criticality of building the second pillar - proactive intelligence on potential threats, suspicious activity, and early warning signs - cannot be overstated. A comprehensive defense strategy includes robust network security, encryption (at rest and in transit), and decentralized data storage to minimize the risk of breaches. Continuous monitoring and the use of advanced analytics, AI, and machine learning can aid in real-time anomaly detection and response. Periodic review of coding practices and security audits will help identify vulnerabilities and prevent their exploitation by unscrupulous elements.
Finally, having a holistic disaster recovery plan in place is sacrosanct to normalize operations post an incident, a required safety net in today's unpredictable environment.
Banks, like DBS, are moving towards a microservices-led distributed core, with strong data governance frameworks to preserve data integrity, security, and compliance. Cloud-native architecture can help with scalability and agility, while a phased transition to microservices can help sharpen operational efficiency to build long-term resilience. DBS has also invested in protective technologies like firewalls, intrusion detection and prevention systems, and anti-malware software to safeguard customers.
The last pillar of a good cyber security strategy includes institutionalizing a robust and continuous plan for customer education and awareness campaigns so that they can be informed about best practices for a safe online banking experience. This can include everything from highlighting the importance of strong, unique passwords through workshops and video tutorials on how to recognize and tackle phishing attempts.
India's digital banking evolution demands a symbiotic approach: cutting-edge technology buttressed by regulatory rigor and customer education. Safer Internet Day on February 11, is a great opportunity to reinforce how banks must balance innovation with integrity, ensuring that we can build a resilient ecosystem where security and progress are two sides of the same coin— and make trust the cornerstone of the digital financial revolution.
