A BIS research paper on cyber risk in central banking noted “the new digital perimeter that must be protected has shifted to identity – the cornerstone of modern security controls in the cloud – and the primary control enforcement on users, devices and data.”
To de Cos’s point this is about banking and not banks per se. As new competitors such as big techs, fintechs, neo-banks and non-banks enter the market and the provision of banking services becomes more fragmented, the importance of secure – and efficient – identity management becomes more and more important.
Inevitably, all financial services are going to outsource more of what they do as they seek to expand their ecosystems, partnering with fintechs, using the cloud, joint venturing with other organisations. “Banking as a service” – BaaS – is already entrenched in the financial system.
That brings its own risks.
“The growth of the fintech industry, of banking-as-a-service (BaaS), and of big tech forays into payments and lending is changing banking, and its risk profile, in profound ways,” argues Michael Hsu, the US Acting Comptroller of the Currency in a paper
