A common defense: taking a collaborative approach to cybersecurity
Handling raw data—whether for warehousing, analysis, or safekeeping—represents an important challenge for many banks, which financial institutions have collectively spent billions of dollars tackling. At Microsoft, we understand the power and the promise that effectively managed data holds, and we’re helping banks make better sense of customer information to uncover new opportunities and reduce costs.
The duplicative nature of legacy data systems is simultaneously a major cost center and significant security risk. The “weakest link” metaphor succinctly captures the nature of the situation in which many financial institutions find themselves: a single failure in one system can often grant an intruder unfettered access to additional systems, providing unauthorized access to systems previously thought secure. Guarding multiple access points is less effective than guarding one; all the maintenance costs involved directly affect a bank’s bottom line.
Market forces and pending regulations (such as the GDPR) may be forcing the issue of what to do about data. The most forward-thinking financial institutions have begun to master their data by creating a single secure data lake, alleviating concerns about chain-of-custody, eliminating duplicative security measures, and reducing regulatory burdens, while increasing their analytical capabilities.
These developments are pointing to exciting new possibilities for the industry:
- Co-opetition. Guarding one door is more effective than guarding many, particularly with extremely scarce cybersecurity resources. What if you shared the burden? The next logical step would be to create a consortium of banks that would instantiate a secure blockchain-powered data ocean. Because raw data is a risk from both a security and regulatory perspective, and because the data per se often has little value, financial institutions should seek to cooperate.
The creation of a secure, cloud-based blockchain also has an additional cost-saving benefit: individual banks would no longer have to create and maintain their own data warehouses for essentially the same data that every other bank has, eliminating redundancy and distributing the cost.
- An existing model. Though the concept of sharing data may seem foreign, the model already exists within financial institutions and has been employed for many decades in capital markets. Market data is widely disseminated—market participants compete and offer value-added services with trading strategies, custodial services, and account advisory.
Conceptually, the situation could be the same for aggregated customer data. A series of transactions, for example, may hold little value in isolation, but when analyzed with proprietary algorithms could prove a gold mine. Imagine if customer data was treated in the same manner: the aggregated data would reside on a secure platform, each member-bank would gain a much better understanding of their customers and could focus on delivering better solutions derived from more complete information.
At Microsoft, our approach applies technology in unique ways—with a trusted cloud platform, tools, and services that empower business agility and enable a new vision of cybersecurity for the industry. As your trusted technology partner, we offer both industry know-how and enterprise-grade solutions. We can help no matter where you are on your digital transformation roadmap.
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