Securing business communication in the financial services industry has become a critical issue, with far-reaching consequences. The use of unsecure business communication platforms poses significant risks for the highly regulated financial sector, including compliance violations, costly fines, data breaches, and reputational damage.
Digital transformation, bring your own device (BYOD) practices, and remote working arrangements have expanded the cyberattack surface, thereby increasing compliance and data security risks across various sectors. The use of consumer-grade messaging apps like WhatsApp, as well as popular collaboration platforms such as Slack and Microsoft Teams, has further intensified these risks.
Regulatory actions taken against banks for the misuse of messaging apps serve as a clear warning about the importance of securing business communication with enterprise-grade mobile messaging and collaboration platforms. Last year, major Wall Street banks and brokerages were collectively fined $1.8 billion by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for the inappropriate use of messaging apps. This enforcement action highlights regulators’ growing concerns about the use of unauthorized communication apps.
Financial institutions also face increasing data security risks associated with messaging apps and collaboration tools. As repositories of valuable personal information such as account data, credit card details, and social security numbers, banks are attractive targets for cyber criminals.
A recent survey conducted by EY and the Institute of International Finance (IIF) revealed that cybersecurity is the top near-term risk for banks globally. According to the survey, 72% of chief risk officers (CROs) identified cybersecurity risk as their primary concern for the next 12 months. This heightened concern is justified as the frequency and sophistication of cyberattacks continue to grow. A report by Contrast Security found that 60% of financial institutions have fallen victim to destructive cyberattacks. The cost of data breaches for financial institutions reached an average of $5.97 million in 2022.
Given the risks associated with consumer-grade messaging apps and unsecure collaboration tools, it is crucial for financial institutions to adopt mobile messaging solutions designed to secure business communication effectively. These solutions should provide security by design and default, meaning they should incorporate enterprise-grade security without requiring complex configurations. Always-on end-to-end encryption (E2EE) should be employed to encrypt messages and data at rest and in transit across all devices and channels. E2EE ensures the protection of sensitive information, privacy, and data integrity, helping financial institutions comply with regulations and maintain proper data governance.
Additionally, mobile messaging technology should offer robust administrative controls to enable IT control over information security, regulatory compliance, and business improvement. These controls assist in managing users, monitoring activity, and enforcing corporate policies. By implementing mobile messaging platforms with strong security features, financial institutions can meet compliance requirements such as Sarbanes-Oxley, Dodd-Frank, FINRA, and future-proof business communication to adapt to evolving global data privacy regulations.
To further enhance compliance, financial institutions should seek mobile messaging technology that guarantees compliance by incorporating technical safeguards and security measures. It is critical to choose a collaboration solution provider that does not collect or share data.
Ease of use is another important aspect of mobile messaging and collaboration platforms for financial institutions. These platforms should be designed to be user-friendly without compromising compliance and data security. Providing employees with easy-to-use all-in-one platforms for secure communication and collaboration across various channels, such as text messages, video calls, and voice calls, will help eliminate the use of risky consumer-grade communication apps and unsecure collaboration tools.
In conclusion, business communication has become a critical issue for financial institutions. Non-compliance fines are increasing, and the costs of data breaches are rising. Therefore, financial institutions cannot afford compliance and data security risks. By adopting secure by design and secure by default mobile messaging and collaboration technology, financial institutions can mitigate this billion-dollar problem. Anurag Lal, the President and CEO of NetSfere, emphasizes the importance of implementing enterprise-grade communication solutions to protect sensitive data and ensure regulatory compliance. With over 25 years of experience in technology and cybersecurity, Lal leads a team that is dedicated to creating secure and trusted enterprise-grade communication technology for workplaces.
About the Author:
Anurag Lal is the President and CEO of NetSfere. He has extensive experience in technology, cybersecurity, ransomware, broadband, and mobile security services. Lal and his team are focused on developing secure communication solutions for enterprises. Previous to his role at NetSfere, Lal was appointed by the Obama administration as the Director of the U.S. National Broadband Task Force and has held leadership positions at Meru, iPass, British Telecom, and Sprint. He has received numerous industry awards and holds a B.A. in Economics from Delhi University.