Bank Information Sharing: Cyber Security Challenges for 2016

With data breaches and other cyber threats becoming increasingly common with each passing day, it should come as no surprise that the rules governing bank information sharing are about to get tougher in 2016 and beyond. Regulators in New York have been aggressively pushing for stronger security requirements for some time now and, along with the related cyber security challenges that financial institutions now face, these regulations are definitely worth paying attention to regardless of where you're located.

The Cyber Security Challenges Banks Need to Overcome

Bank Information Sharing in 2016

According to the new rules that are outlined by New York regulators (but have not yet gone into effect), a number of important changes may be just on the horizon. Two-factor authentication would become mandatory for customers accessing their banking account online, as well as for employees who access databases and external networks from their work computers. Two-factor authentication is a process that requires both a password and an additional form of authentication, usually a numerical code of some kind, before access can be granted.

The War for Your Information

Another of the cyber security challenges that financial institutions will face moving forward has to do with governments who want large tech companies to build ways into their system for authorities to access customer information for any reason. This method, commonly referred to as a "back door," is already making headlines - a court recently ordered Apple to build a back door into future versions of the iOS operating system operating system. From a bank's perspective, the government's request would allow them to easily gain access to the financial information of criminals and terrorists, regardless of the type of security measures that are in place.

For people concerned with their privacy, the issue is much greater. If it is possible for someone to gain access to financial information regardless of security, it is possible for such a power to be abused. People against such measures argue that the future of our right to privacy as a society could be at stake.

The Landscape Moving Forward

All of these new cyber security issues and regulations regarding bank information sharing are designed to solve a very big problem: the fact that the financial industry has proven time and again that it is not ready to face the types of cyber security challenges that are now common place in today's modern environment. Federal regulators argue that the reliance of banks on third-party service providers is particularly troubling and that something needs to be done to protect American citizens from digital attacks.

While nobody is arguing that something must be done to increase cyber protection, whether or not these rules and regulations will have the desired effect is something that very much remains to be seen.