What Goes into the Making of IAM Technology in Financial Services Industry?
Financial services industry—which includes banking, insurance, risk management, wealth management, asset management, and others that are monitored at the state and federal levels—is subjected to various regulations. It is crucial to explore technological aspects involved in the implementation of IAM solutions, for fulfilling governance requirements such as policy enforcement, assessing risks, auditing, compliance and reducing frauds.
Requirements for an IAM implementation by their very nature are complex. A broad range of stakeholders are integrated under the umbrella of IAM capabilities. This includes setting up of strong fundamentals in managing user identities. Understanding industry and compliance specific challenges in implementing
IAM solutions and harnessing IAM technology in fast changing IT ecosystems is imperative.
In current digital environment, IAM in financial services has moved beyond provisioning and access controls. With continued adoption of various customer engagement models, innovative mobile and cloud technologies, financial services industry is at a constant struggle of creating robust capabilities to achieve IT security, workflow automation and system optimization. IAM in financial industry covers a wide range of users, devices and apps—leading to a massive upsurge in quantified identities, including employees, consumers and third-party vendors. Integration strategy of IAM (and IT security solutions) in the current environment must take into account vulnerabilities emanating from sensitive data, digital assets and intellectual property.
In the financial services industry ensuring reliable and efficient access is complex. IAM technology in this scenario needs business intelligence in defining: ‘Who’ (employees, partners, contractors, customers), ‘What’ (sensitive customer information, database access) and ‘When’ (location, time, IP address). The deal is to achieve a strategic balance between providing information to right set of users and ensuring safeguarding of sensitive data.
Cyber regulations transcend borders. For instance, financial institutions with multinational imprints, especially in the European Union region, would be required to comply with General Data Protection Regulation (GDPR) starting May 25, 2018. GDPR gives citizens control of their personal data and all institutions that collect, process or share an individual’s personal data will need to gain ‘freely given, specific, informed and unambiguous’ consent by the customer themselves. This is going to impact the way data privacy laws and mechanisms are standardized across industries.
In addition to self-driven checks, businesses in the financial sphere need to comply with strict norms, including OMB Circular A-123, Basel II, Consumer Privacy, Data Privacy, Check 21, Anti-Money Laundering, SAS 70, BSA, MiFID, PATRIOT Act, etc. While grappling with stringent compliance criteria, the industry is required to invest efforts to simplify compliance processes.
Addressing Unique Challenges While Implementing IAM in Financial Services
Managing identities in complex financial IT environment requires unifying and streamlining identity—from all the systems, apps and platforms under a repository guided through Active Directory or target source. This enables enterprise IT to gain control and achieve better visibility of users’ actions, thereby reducing risk.
Robust IAM Capabilities to Create Futuristic IT Ecosystem
With strategically aligning IAM capabilities, financial organizations minimize risk of information or data loss. It also offers in-depth knowledge around ineffective and inefficient processes within an organization, thereby providing greater monitoring and checks. Alongwith understanding requirements of IAM technology, experts encourage IT folks in financial industry to take a 360-degree view of challenges and assess them from futuristic, best practices and strategic standpoint.
When it comes to implementing IAM in financial services, the industry faces certain challenges that are unique to it, leading to concern areas that are often overlooked.
Avoid exponential Identity creation by streamlining one user-multiple applications. Identity is no more just about a user, the algorithm of identity creation takes into account a user, associated devices and applications. This creates a conundrum of identities that grows exponentially. In the midst of IoT revolution, it boils down to the number of identities held by a single user, thereby creating multiple identities for monitoring, organizing and controling.
Creation of orphan user accounts should be discouraged. Orphan accounts are basically an identity in the system that does not have a defined owner. Often an account is created for an important task, but the usage of the account is not frequent. Such an account also lacks a clear ownership, resulting in undefined accountability and unmonitored access of sensitive data.
Putting in place a clear procedure for monitoring of users’ accesses. Despite being an important checklist item, monitoring accesses is a difficult procedure to follow. This leads to hackers gaining access to unmonitored users and causing financial losses to organizations. Furthermore, without access monitoring, IT audit reports remain inconsistent and compliance to relevant regulations is not achieved.
Patchy control of privileged accounts to be monitored for avoiding breaches. Another important issue is lack of control over privileged application access, including accounts of superusers. It is crucial to keep a tab on accesses made through privileged accounts as these could be easily located by cybercriminals. This is all the more important in a scenario, wherein temporary permissions are allocated to users and access is not revoked.
Providing just as relevant applications’ accesses to users. It has been observed in many situations that individuals are given access to information or data they might not need, increasing the chances of misuse. A defined process should be followed and enforced to ensure that systematic flow for accesses is maintained in all situations.
With evolution in digital technology, financial institutions are also seen to evolve its capabilities, especially in harnessing app-based mobile activities. This is leading the industry to integrate IAM capabilities to create a robust and scalable system as per newer developments in the FinTech space.
Integrate IT systems with customized capabilities. Various applications are integrated in the financial services IT architecture to serve the operational requirements, which might not be under the purview of IAM setup. Driving identities in enterprise applications setting through IAM platform is crucial for compliant, auditable and efficient system. Furthermore, attributes related to application access might need customization on the back-end, which should not be ignored.
Bring together Internet of Everything (IoE) devices in a single dashboard. Integration of IoE may help financial services organizations in providing better customer experience, reducing risks and redundancies, while increasing their market share. Key for successful implementation of IoE application is integration with a single IAM dashboard to monitor the status, location and security of devices, along with providing multiple alerts and notifications on a real-time basis.
Implementation of Consumer Identity and Access Management (CIAM) is leading the way. CIAM solutions are enabling financial services industry to put customers at the core, allowing users securely sign in into their systems through the social profiles. It helps in identifying and understanding user behavior across various digital platforms—including website, mobile applications and other marketing channels.
Setting a strong groundwork with Federated Access Management (FAM) mandate. It is important to constantly upgrade or patch new components into integrated system to circumvent the risk of being obsolete in the face of newer cyber threats. That’s where FAM comes into the picture, providing instant upgrades, selecting the right set of components and patches, and enabling the system to seamlessly deploy IAM processes.
Becoming rich in Big Data insights. Financial services industry is at the forefront of implementing big data solutions, enabling it to take quicker decisions, optimize processes and generate insights. Balancing vast amounts of data on infinite scale requires continuous surveillance and on-going capacity optimization.
Financial organizations have to build digital capacities to secure IT ecosystems through digital identities checkpoints for all sets of users. The banking sector is seen to use custom apps for better functioning of their corporate offices and customer care centers, along with facilitating secure transfers of funds. The insurance companies also use a variety of applications for analyzing market data and helping customers manage their policies. Companies in the financial and insurance sectors are increasingly using apps to provide value-added services such as mobile banking, ATMs, risk calculators, fund transfers, etc. by utilizing big data insights.
To this effect, various FinTech capabilities are to be integrated in to the IT architecture. Such capabilities should support a mechanism that caters to high-volume business processes, allowing strategic treatment of access to various identities (including devices, users, applications and resources). The solution takes financial services enterprises closer to highly secured, personalized, quality, compliant and secured digital interface.
An agile Active Directory is the key to management of identities! Properly managed Active Directory(ies) strengthens the process of audit and compliance as it maps users with values. It also enables tightened security related to accesses, while bringing workflow success, business continuity and value addition.
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