The Impact of AI on Cybersecurity Part 2: The Role of AI in Financial Services

Innovating Business Operations and Cybersecurity 

The financial sector has seen a significant transformation due to digital technology. The industry has been pushed to be more dynamic to meet the demands of customers, regulatory requirements, and security threats, and remain competitive while safeguarding customer data and assets.

Financial institutions (FIs) have rolled out new digital technology to improve the customer experience through the integration of artificial intelligence (AI), machine learning (ML), and virtual assistants.  Organizations can leverage AI’s predictive analysis capabilities to help identify potential threats and fraudulent activities to better identify potential threats and fraudulent activities to enhance risk management and fraud detection. In Part 2 of The Impact of AI on Cybersecurity series we explore the role of AI in the financial sector, the benefits of AI/ML to boost the effectiveness of cybersecurity, and how FIs can confidently innovate while staying proactive against cyber risk.

AI in Financial Services

The role of AI in financial services is undeniable.. From automating repetitive tasks to readily available chatbots to assist customers, AI has provided opportunities to improve digital banking by making the process more efficient, personalized, and accessible. However, cybercriminals exploit new technology to breach systems for malicious purposes, and an important question arises: How can AI/ML boost the effectiveness of cybersecurity for FIs? The answer: automation.

AI can automate repetitive tasks like sorting through log data, analyze vast datasets, and identify patterns that may be difficult for humans to recognize, and improve an FIs ability to gauge risk, detect and prioritize threats faster and more accurately. FIs also experience a reduction of false positives and an increase in the accuracy of threat detection, ultimately improving the overall efficacy of cybersecurity measures for FIs. With access to new technology and products, FIs must proactively address the vulnerabilities and risks associated with integration of digital technology to maintain safety and satisfy regulatory requirements.

Balancing Technology Integration with Cyber Safety

FIs must manage cyber risk as they integrate AI into their operations – not after. There are potential gaps and therefore risks to an FI’s cybersecurity when new technology is introduced if those risks and vulnerabilities are not considered before they are rolled out across the organization.  FIs can effectively balance technology integration while maintaining cyber safety with a robust protocol that includes a strategic and multi-layered approach to cyber risk management, including firewalls, intrusion detection and prevention systems, and regular risk assessments.  More strategies to consider:

1. Conduct risk assessments to identify potential vulnerabilities and do them continuously and consistently. Assess not only the technology itself but also how it functions with existing systems.
2. Use risk assessment data to determine residual risk to develop incident response plans to mitigate and reduce the impact of a breach quickly.
3. Utilize industry-specific technology to proactively identify, detect, and prevent potential threats.
4. Train employees on cybersecurity best practices, policies, use of strong passwords, and multifactor authentication.
5. Regularly update software and hardware to ensure that security vulnerabilities are addressed in a timely manner.

AI’s emergence in financial services and cybersecurity presents potential but comes with its set of challenges.  FIs should look to partner with experts who are well-versed in the financial services industry and cyber risk management.  By adopting a proactive approach and ensuring a balance between technological integration and security, FIs can still harness the full potential of AI, without compromising security.

https://defensestorm.com/insights/impact-of-ai-on-cybersecurity-part-3-the-defensestorm-approach/

https://defensestorm.com/insights/ai-and-its-impact-on-cybersecurity-part-1-role-of-ai-in-cybersecurity/