Commentary
BANKING TECHNOLOGY | Contributed Content, Singapore
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James Hatcher

Reforming business compliance for the APAC banking industry

BY JAMES HATCHER

Cyber security continues to be one of the fastest-growing threats to banking institutions.

In the wake of a financial crisis and recent Consumer Data Protection Act implementations, most banking institutions are looking to evaluate their governance, compliance and control systems for increased regulation, scrutiny, and oversight.

According to a recent survey by KPMG, majority of Asia Pacific-based executives (73% respondents) confirmed that Governance, Risk and Compliance (GRC) are of the highest priority on their agenda. Effective information security practices are becoming more important than ever now, taking into consideration breaches of data confidentiality and security threats posed on to the banking sector.

As a result, banks are looking to transform their business compliance model to achieve better security measures and subsequently increasing the technology adoption rate across the banking industry, especially in the file exchange and communication aspects which have been under invested in until recently.

The majority of banks today have over complicated systems to monitor and secure the data traffic that moves within the bank amongst its own internal divisions, applications and to their external counterparts.

Moreover, the complexity has increased due to internet usage. Banks are facing the challenge of collecting data transactions across a number of processes and complying in accordance with multi-jurisdictional requirements.

Currently, banks tend to miss more than 80% of data that is in the form of files of various sizes and types that need to be transferred across secured data transmissions systems. As part of any regulatory compliance and engagability, data needs to be tracked, traced and have the compliance department alerted.

Now banks have the opportunity to reduce these complexities, decommission old legacy systems and migrate it all onto a single platform. To do so, leading banking organizations are embracing technology that can help them to manage their day-to-day compliance requirements.

The comprehensive communication platform must be able to manage and track all transactions that move through the bank’s systems and algorithm databases, with business rules that are embraced inside the data transmissions. These actions provide an audit trail for compliance purposes and tighten security measurements. In addition, in the event of a fraudulent transaction taking place, banks can use these trails to evaluate the patterns that cause such cases to happen.

Managed File Transfer Solution for Banking Institutions
The modern managed file transfer solution enables banks to meet compliance expectations to ensure greater security yet with a lower cost of deployment.

‘Human-to-human’ integration is a core trait of managed file transfer solutions. ‘System-to-system’ integration is crucial and mostly automated, but the human-to-human integration focuses on the way people within the bank communicate with others.

It senses when the outgoing data should not be sent, for example data such as account number and social security numbers. Employees can also attach spreadsheets and documents to be sent out. With this feature, the banks are able to look for specific items, identify it, and quarantine it if it is deemed inappropriate

Also, the managed file transfer solution can automate attachments that need to be secured and send an email message to the recipients that informing them that there is a document waiting for them which requires them to log on to the system to retrieve it. This will secure the item and prevent employees from stealing essential data from the organization.

On the other side, today’s customers demand a much more challenging and greater standard of service. They want banks to deal with their transactions in real time. This level of access should be made available to all clients connecting into the banks’ network infrastructure.

Through a quality managed file transfer solution, clients are able to connect through the platform for the purpose of transactions and access will be denied if any potential breach or fraudulent transaction is detected.

Whilst the choices of managed file transfer solution are aplenty in the market, selecting the right solution vendor is paramount as it is a business integration and collaboration platform for banks to move files among employees, systems, and trusted business partners in a secure, compliant and efficient manner.
 

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.

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James Hatcher

James Hatcher

Mr. Hatcher is responsible for all aspects of the regional business of Seeburger in Malaysia. He regularly works with multinational companies helping to define their I.T. and operational infrastructure for Asia business. He is a seasoned professional with over 25 years Asia Pacific experience who speaks Mandarin Chinese. Since 1996, he has been an evangelist of leveraging the Internet for Supply Chain Management, business collaboration and operational efficiency. In the past, he lectured extensively in the United States and Asia to include Stanford University, MIT Sloan School of Business and Nanyang University Singapore. Mr. Hatcher was formerly with QAD Inc. as Director of Marketing, eBusiness & Supply Chain Asia Pacific.

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