Unless you’ve been living under a rock for the past few years, you’ve probably heard of a trojan known as Zeus. It is often referred to as the "Man-in-the-Browser" because it begins by infecting the customer, not the institution. It takes advantage of vulnerabilities on a customer’s computer and waits for the customer to connect to an institution’s website. Once the customer connects, the trojan is capable of detecting that the customer is browsing a financial institution’s website and can silently make transactions in the background. It can also alert the attacker in real-time so that the attacker can hijack the customers session and manually perform transactions of his own.
The point of this post is not to discuss the technicals of Zeus. Rather, the point is that Zeus, and its variants, are a direct result of web-based electronic banking. Prior to large-scale deployment of online banking systems, the concept of a Zeus-like attack was not possible. More specifically, the deployment of consumer-focused online banking systems allows for the existence of Zeus-like malware.
The tremendous popularity of consumer-based devices such as mobile phones and tablet computers is a strong indicator that the hardware and software technology providers are shifting focus to the consumer market. There was a time when technology innovation was directed at the enterprise. The cost and expertise in developing, deploying and administering the systems made them impractical for the commercial consumer market. However, the technology landscape is changing rapidly. Always-on, always-available mobile networks, cloud-based software and storage, and cheaper, faster and easy-to-use computing systems have created a consumer market viable for technology providers. This shift in focus is having a profound impact on how technology is implemented in the enterprise. Rather than the enterprise market being the primary force driving technological innovation, the consumer market is assuming that role (McDonald, 2010). This paradigm shift is sometimes referred to as the “consumerization” of technology and leaves the enterprise in the position of having to react and support the consumer, rather than dictating to the consumer how technology can be used (Gartner, 2005).
The growing popularity of consumer-focused devices and services is forcing financial institutions to adapt in order to remain competitive. Consumers demand technology, which prompts some financial institutions to offer products and services to meet those demands, which in turn forces the remaining institutions to also adapt and offer solutions so as to remain competitive in attracting customers. Mobile banking is an example of such a near-term technology decision many community financial institutions will have to address. The fact that institutions even have to consider mobile banking solutions is a direct result of the popularity of consumer-based mobile devices. As more and more consumers use mobile devices, the pressure on financial institutions to support the devices increases. The consumer market is shaping the technology landscape of community financial institutions.
Consider cloud computing as longer-term example. Cloud computing is the name of a delivery model where data and applications are accessed and stored on the Internet. Some of the most successful technology companies are built on a cloud-based model. Google, for example, offers cloud-based email, word processing and spreadsheet alternatives to historically desktop based office applications offered by Microsoft. Mobile devices and tablet computers, the iPhone and iPad from Apple being notable examples, are becoming windows to the cloud. The applications that run on those devices are increasingly using the cloud as the primary data store. The attraction for the consumer is that cloud-based services are cheap (often free) and provide a convenience that is very difficult for traditional, locally deployed software solutions to match. The attraction to the service providers is that cloud-based solutions are cheaper to develop, deliver and maintain.
What does that mean for financial services? That remains to be seen but if the cloud-based business model proves to be valid then financial institutions are likely going to have to consider cloud-based solutions to remain competitive. In other words, as the competition, be it other community financial institutions or very large national banks, deploys cheap, efficient cloud-based solutions, community financial institutions will have to also deploy such solutions to remain price competitive. It is difficult to predict the form that cloud solutions will take but examples could possibly include online backup and disaster recovery solutions, cloud-based online banking systems, or even a cloud-based help desk.
On a less theoretical note, one needs only to look to the consumer banking market to see the impact the customer is having on technology decisions. Customers can bank online, pay bills online, check balances on mobile phones, and even receive text messages when balances are low. JPMorgan Chase recently ran a commercial where newlyweds take a picture of a check with a cell phone and it is instantly deposited into their account. Many community financial institutions will make the argument that community banking is different because it’s a relationship business. Relationships will always have value, but the young, technically sophisticated consumer of today is the community financial institution’s business customer of tomorrow. These individuals, who have grown up in the wake of social media and consumerized information technology products, are going to expect a certain level of technical sophistication and demand the same convenience they have come to expect.
It is impossible to predict the future of technology. However, it is entirely reasonable to assume that security implications will grow in proportion to new technologies and services. If Zeus-like attacks were made possible by the large-scale introduction of consumer-based online banking systems, then it is logical to expect that other innovations in technology like mobile banking, cloud computing, or whatever the next greatest innovation happens to be, will introduce their own security issues. What is particularly relevant to community financial institutions is that the consumer will drive the market. Ultimately, institutions will have very little choice when deciding to implement new technologies should they wish to remain competitive in attracting new customers. Consequently, they will have to deal with the related security implications.
Gartner Inc. (October, 2005). Gartner Says Consumerization Will Be Most Significant Trend Affecting IT During Next 10 Years. Retrieved February 21, 2011 from http://www.gartner.com/press_releases/asset_138285_11.html
McDonald, Mark (2010). Power shift! What happens when consumers drive technology markets. Retrieved February 18, 2011 from http://blogs.gartner.com/mark_mcdonald/2010/08/30/power-shift-what-happens-when-consumers-drive-technology-markets/
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