Improving risk management for banking communications

Core Insights - The financial industry faces significant regulatory fines for off-channel communication violations, totaling nearly $2 billion in 2022, yet the use of unauthorized encrypted messaging apps persists due to client expectations and convenience [1][2] - The rise of AI-driven identity fraud and cyberattacks poses a broader threat to the banking sector, jeopardizing not only financial assets but also the foundational trust in the financial system [2] - Emerging security technologies are available to address these threats while enhancing client value and compliance [3] Regulatory Environment - Regulatory fines for off-channel communication violations have become a routine occurrence, with high-value clients demanding accessibility through their preferred communication methods [1][2] - The financial penalties are often perceived as a cost of doing business rather than a deterrent [2] Threat Landscape - The shift to mobile communication tools has led to increased reliance on consumer-grade encrypted apps, compromising security and compliance [4] - This reliance has resulted in fragmented communication, compliance blind spots, and vulnerabilities that can be exploited [5] - Evolving fraud tactics, including AI-enabled voice-cloning and identity takeovers, are outpacing existing IT defenses, leading to rising remediation costs [6] Emerging Security Technologies - Next-generation encryption and communication protocols are being developed to enhance compliance and security while maintaining client convenience [7] - Messaging Layer Security (MLS) allows for secure key distribution and device-level controls, enabling a seamless coexistence of personal and company devices [7] - Post-Quantum Cryptography (PQC) is essential for protecting against future quantum-enabled attacks, representing an upgrade from current cryptographic protocols [7]