Posted on 4/05/2017 by Adrian Kinnersley
Author: James Warren | Managing Director, Europe
The UK’s Financial Conduct Authority has set out a range of aims and goals for the coming financial year, and FCA director Nausicaa Delfas delivered a speech at the Financial Information Security Network, outlining the aims and objectives of the FCA’s plans.
Unsurprisingly, the focus of the FCA in coming months will be directed toward cyber security and fintech. Given the recent spate of security and data breaches involving Wonga, Three Mobile, TalkTalk and Tesco banking, the FCA is right to turn their attention to the ever-changing financial technology and data security situation.
Recently, media attention has turned to the possibility of DDOS attacks being conducted through household items connected through the ‘internet of things’, such as smart TVs and even refrigerators. While the severity of these attacks range from low-danger to ransomware takeovers, which experts say are not too problematic in the current climate, this does open the door for larger attacks – and more exploitative attacks on personal data.
Hackers and groups looking to exploit security holes and failures in protective software are likely to be motivated by financial gain, as proven by the recent Microsoft Word flaw which enabled hackers to distribute fraudulent software to users in Australia, and strengthen their efforts to steal millions of dollars from bank accounts. The main complaint about the handling of this attack is the timeframe taken by Microsoft to close the security holes, with reports saying that they chose to investigate the issue in greater detail, rather than patching the issue to protect users.
The FCA have addressed this in their plan, with cyber security resilience being flagged as a major issue in all technology sectors. The focus on fintech firms and data security will be underpinned by knowledge from the National Crime Agency and the national Cyber Security Centre.
Another major issue for the FCA is the upcoming separation of Britain from the European Union. This may affect the ability to implement international security measures, in the event of a communication breakdown between the EU member states and Britain. The FCA have stated that they wish to remain involved in multinational security decisions post-Brexit, to ensure a continued and co-operative international security effort.
The FCA have also stated that crowdfunding companies will be facing stricter regulations, as current arrangements do not comply with the official regulations concerning the safety of client investment, assets and money, in events where companies fail and exit the market unexpectedly. The FCA have determined that the best approach to this is to work directly with crowdfunding and peer-to-peer lending corporations, to ensure correct procedures are being implemented.
Given the growth of digital data and the rise of technology being used throughout all sectors, it's a positive move for the FCA to focus on the security of financial data – and it's a sensible move to keep up with the changing trends in fintech and digital connections. Consumer trust has been damaged greatly during the past year of unrelenting cyber-attacks and personal data leaks, so it is to be hoped that a fresh focus can restore the industries’ integrity.
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