Technology has been a great help to industries of all types and sizes. Through improved reliability and efficiency, technology has lowered operational expenses and decreased the need for human intervention in routine tasks. Digitalization is used by businesses to be more efficient and productive, making it one of the recipes for a company’s growth and success.
For the finance industry, technology has made a great impact especially in securing very important data. You are dealing with money and security is one of the most important aspects of why you rely on technology. However, no matter how hard you try to keep up, challenges will always be there. The best thing for you to do is know and understand what these challenges are to realize the right solutions to address them.
Here are the IT challenges the financial industry is facing:
Technical Expertise
Investing in new technologies and staying updated are two of the biggest issues financial services companies deal with. Every day, new technologies are developed. It’s challenging to decide which ones are worthwhile investments, especially in a market that has historically been slow to adapt.
Finding the correct support to build systems and move data is challenging even when businesses begin to consider updating and incorporating new technologies. The majority of businesses don’t have professional cloud engineers or AI specialists on staff, thus hiring third parties is necessary to assure successful deployment. For businesses to continue providing value to their customers, their corporate cultures must change to become more tech-friendly.
Cybersecurity
A cyberattack is a serious challenge to the financial services sector and presents serious dangers to businesses and their clients. Although they provide new attack vectors for criminals, online banking and digital payment systems boost convenience for consumers. Businesses that use outdated legacy systems are increasingly being targeted by sophisticated methods of hacking.
A single attack might cause both the business and its clients to suffer large financial losses as well as reputational harm. Businesses will lose an average of $4.35 million in 2022 due to data breaches. Firms that are found to be in violation of the rules (such as not taking proper care to protect client data) may be subject to stiff fines from the FCA.
Modern attack techniques can defeat common cyber defenses. Previously, spam detectors could quickly detect the numerous grammatical problems in phishing emails. Now, they are expertly made and almost exact duplicates of actual business emails.
Phishing emails are the most prevalent type of cyber attack, with 3.4 billion being sent daily. Hackers may exploit any information they learn through phishing, like login credentials or account numbers, in subsequent assaults that put systems at risk.
About 10.5% of the overall IT budgets spent by financial services companies go toward cyber security. Businesses will need to make significant investments in effective cyber security measures, such as automated monitoring systems and specialized incident response personnel.
The first line of defense against attacks like phishing is frequently employees. Businesses must make sure that all employees adhere to safe password generation standards, and they should consider implementing training that teaches employees how to recognize the most recent risks.
Regulatory Compliance
Many businesses have been pushed to modernize and consider digital transformation due to regulatory changes. ‘Traditional’ approaches and outdated legacy software are insufficiently strong or secure to function in the current workplace.
After the FCA launched investigations into companies due to insufficient security procedures or poor data handling, the companies were hit with hefty fines.
Customer Demands
Customers’ preferences are shifting toward personalized, practical, and technologically advanced services as expectations of them continue to rise. Customers are quitting slow-changing businesses and switching to competitors.
Staying Competitive
It’s becoming more difficult for businesses that rely on outdated, restrictive proprietary systems to stay competitive
Businesses now have the opportunity to innovate and offer new services and products that are frequently faster, more convenient, and less expensive than those provided by conventional financial institutions due to digital disruption.
For instance, some workplaces have entirely remote operations. Businesses can lower their overhead costs and put those savings into their products because they won’t have to pay for offices, furniture, desktop computers, or travel subsidies. This puts pressure on established financial institutions to find methods to cut expenses and improve efficiency in order to stay competitive.
Aside from all these serious challenges, firms of all types of industry sometimes experience system downtimes. These could have a negative impact on the customers and most of the times stain the company’s reputation. We know, you want to stay competitive in this digital world we are in today. Understanding these challenges and knowing where your company stands when it comes to your IT and cybersecurity is the first step to finding a perfect solution for you. Here at Intelecis, we have the right services to address these challenges. We will assess your company and give you the exact solution that is tailored to your needs.
Contact us today to discuss our financial industry IT solutions.
