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Banking Evolution: Challenges and Opportunities in the Digital Era

Explore unsolved problems in banking, from cyber threats to regulatory compliance. Learn about new revenue opportunities and the impact of non-conventional competition in this dynamic industry. Discover the changing landscape of US banking and emerging trends at a pivotal industry meeting.

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Banking Evolution: Challenges and Opportunities in the Digital Era

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  1. CyberTrust – PI meeting Unsolved Problems and Issues March 18, 2008, Yale University Dan Schutzer Executive Director FSTC

  2. What’s changing in US Banking? Mergers and Acquisitions Increased Regulations Going Global Payment Convergence, SEPTA Web 2.0 and N Gen Non-conventional competition Increased Threat New Revenue Opportunities Non-conventional competition

  3. Public Policy • Compliance and Regulatory reporting and monitoring • Patriot Act • Anti-Money Laundering • Sarbanes Oxley • Federal Rule of Civil Procedure (FBCP) • Regulation E and CC – payment related • Basel • Data Leakage notifications • FFEIC two factor guidance • to enable financial institutions to support secure remote access.

  4. Business Processes • Steeped in tradition and bound to legacy systems • Based on paper-bound processes • Need for more checks and balances and less reliance on PII data, such as social security numbers, mothers maiden name, and account numbers • Need for innovative re-thinking on key processes such as: • Account opening • General ledger • Risk Management • Record classification • Disaster Recovery and Incident management • Auditing • Payments and Trade Processing

  5. Social Norms • Huge, global • Functional Decomposition along relatively independent product lines • Need for customer-centric integrated access to information, and cross-channel, cross-product services and features • Current behavior of employees and customers need to be more security-aware • Major emphasis on data leakage; less emphasis on more critical areas such as prevention of data tampering and service denial

  6. Data Privacy and Security • Customers rights to access information requires, easy to use, but strong encryption and access controls • Privacy often impacts security • Monitoring employees for Insider Threat • Monitor customers for anonymous behavior • Find and shutting down spoof web sites • Contradicting policies around the world • Europe, opt-in • US, opt-out • Who owns information about customer reputation?

  7. Are laws and regulations working? • Laws and regulations are reactive, not proactive • Too many regulations to comply with, often contradictory • Have trouble monitoring employees and customers from a security and fraud finding requirement • Law of unintended consequences

  8. Questions? Dan Schutzer 917 338 6480 Dan.Schutzer@fstc.org

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