IBS Journal December 2017 EDITOR’S NOTE THERE WILL BE LOTS TO DO NEXT YEAR, BUT SECURITY IS KEY


IN THIS ISSUE WE TAKE A FOND LOOK BACK AT 2017 AND A CAREFUL LOOK AHEAD TO 2018. WE HAVE EVERY REASON TO BE OPTIMISTIC ABOUT THE YEAR AHEAD, BOTH FOR US AND FOR THE BANKING, FINTECH AND SUPPLIER COMMUNITIES. BUT THERE ARE RISKS


Bill Boyle Senior Editor


billb@ibsintelligence.com


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here is plenty of food for thought in this issue of IBS Journal for any banking technology CIO or CTO spending some time this holiday season planning


next year’s strategy. For most banks this task is a continual process, reviewing digitisation programmes, choosing fintechs to partner with, planning Open Banking initiatives and, in a task which is becoming harder every year, cruising the best Universities to ensure a steady supply of talented new staff. During the course of this year the IBS Journal team has been at SIBOS, Money 20/20, Finastra Universe and many other events and in our roundups of the year we have attempted to evaluate the various technologies we saw at these key events in a priority order to be of some use to our readers.


The Finastra Universe event provided a truly unique encounter between our senior reporter Alexander Hamilton and Sophia the robot which, if you haven’t seen it I suggest you do now: http://bit.ly/2zIUecF


Security is emerging as a major priority, particularly in the wake of calamities such as the Equifax breach – one which will have reverberations in the finance industries for years to come in terms of reputation loss and customer confidence impact.


Deloitte was hit by a cyber attack this year. As is now routine for almost all cyber attacks the hackers had been burrowing away in the bowels of the bank like a very unsavoury parasite, unnoticed for months – and it is said to have compromised Deloitte’s global email server and via an administrator’s account, granted the hackers access to restricted areas and information.


As our up and coming partner in our cyber security webinar,


Philip Lieberman of Lieberman Software says: “Once the criminals are within your perimeter there is only one way to stop them and that is to ensure that they have no admin account privileges. Why do such simple measures remain overlooked?”


There are dangerous footpaths ahead for the banks as they navigate the treacherous technology forests that have already tripped up corporates and telecos the world over. The average bank technology chief would not recognise the architecture or even the look of the new breed of data centre. As one of the Open Compute Project leaders said to me recently: “They would think they had arrived on another planet.” Not only have Open Standards revolutionised the way data centres are now built but entirely new breeds of data centres, such as Vapor IO’s modular and network edge functionalities and the rapid use of containerisation. These trends are moving so fast that the banks are in real danger of having few internal staff who even understand the basics of the new data centre world.


Open banking is another minefield. The world of Application Program Interfaces (APIs) which have powered the most recent bank start-ups of recent times is itself a huge cause of security breaches if they are not written or deployed properly.


The most obvious problem with Open Banking is the effects it will have on fintechs. They will soon have enormous access to banks’ systems and data lakes. While the fintechs will be able to provide more personalised products, they will be operating with much more autonomy. As these new responsibilities bear down on fintechs’ regulatory and cybersecurity burdens will they have the adverse effect on the banks’ security policies? We’ll let you know this time next year.


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