White Paper | Making the most of IAM Technology in Financial Services Industry

The reason why financial services enterprises require robust identity management systems that would help them approach security and compliance in a holistic manner.

Let’s start with exploring various technological aspects of implementing IAM Solutions in the Financial Services Industry. For starters, the regulatory environment – General Data Privacy Regulation (GDPR) and the deadline for implementing measures should be a reason enough for tightening IAM in the financial services industry and charting a clear strategic roadmap. Consumer interaction in the financial services industry is the future of identity management. Enterprise IT System in the Financial Services industry needs to be robust, and they can benefit from Consumer Identity and Access Management (CIAM) capabilities – including managing identities, understanding challenges in implementing IAM Solutions, harnessing IAM technology in the changing IT ecosystems. Within the financial services industry, the increasing demand from the business for getting reliable and efficient access given to the employees, partners, contractors, partners, or customers, is a complex task. Basic IAM implementation needs to be optimized for workflow and processes. There is a greater need for achieving a balance between providing information to the right set of users while ensuring that sensitive personal data is safe – overall known as user identity and access management practices. For a user-facing interface, it includes identity management SSO, data management, digital identity security, so on to curtail challenges in this regard.

This calls for a strategic focus when it comes to achieving compliance, managing risk and administering identity/access. The financial services industry faces significant challenges in managing data in a secure manner while complying with various regulatory mandates, along with providing a seamless user experience across complex and growing IT infrastructure. The reason why financial services enterprises require robust identity management systems that would help them approach security and compliance in a holistic manner. The FinTech ecosystem includes identity management, asset management, industry requirements and analytics, compliance to requirements, user access management processes, employee identity and access management, and so on.

IAM implementation in the financial services industry is required for managing identities in complex IT environments. It unifies data – based on identity – from all the systems, applications and platforms under a repository guided through Active Directory Integration. This helps organizations to gain control and achieve better visibility of users’ actions, thereby reducing risk. With the implementation of IAM Solutions, financial organizations minimize the risk of information/data loss. It also provides in-depth knowledge around ineffective and inefficient processes in an organization. Bringing together business and technology is the key, it can be achieved automated reporting, privilege identity management and checks.

Table of Contents:

  • Overview of FinTech Capabilities
  • IAM Implementation Challenges in Financial Services Industry
  • Conventional Approach to IAM Integration
  • IAM for Financial Institutions in Current IT Environment
  • Avancer Corporation’s Capabilities in Financial Service Industry

Overview of FinTech Capabilities
With the continued adoption of various customer engagement models, along with innovative mobile and cloud technologies, the financial services industry is in constant flux to create a robust Identity Management solution for securing its data. In the current digital environment, Identity and Access Management (IAM) in Financial Services has moved beyond mere provisioning and ensuring correct access. IAM in Financial Industry covers a wide range of users, devices and applications – leading to an upsurge in quantified identities.

Furthermore, the Identity dynamics is not limited to employees, but also includes consumers and third-party vendors. The integration strategy of IAM (and IT Security Solutions) in the current environment has to proactively take into account the vulnerabilities emanating from sensitive data, digital assets and intellectual property. This is to be achieved together with the enablement of systematic requirements keeping together hybrid IT Systems in financial service setup.

The Financial Services industry has to bring Consumer Identity and Access Management (CIAM) to support digital business strategies, minimize security risks and continuously improve consumers’ digital services experience. Financial enterprises face major challenges in providing information security as well as adhering to compliance while trying to meet the growing demands of various IT platforms and emerging technologies. The struggle with a dynamic and convoluted IT environment is that the complexities related to IAM technology have gone up exponentially.

Integrating IAM technology now includes connecting with cloud applications, IoT synchronized, active directory management, privilege accounts management, access governance, mobile access certifications, and so on. There is a high risk with cybercriminals to conduct sophisticated cyber-attacks and procure highly sensitive personal information. In the case of financial institutions, personal information could be monetary in nature. Therefore, it adds greater responsibility on the part of businesses in the financial industry. In addition to self-driven checks, many businesses in the financial sphere need to comply with regulatory and compliance norms, including SOX, OMB A-123, Basel II, Consumer Privacy, Data Privacy, Check 21, Anti-Money Laundering, SAS 70, BSA, MiFID, PATRIOT Act, etc. are making it all the more imperative for businesses to follow suit.

In this white paper, we will explore various technological aspects of implementing IAM solutions in the Financial Services Industry setting. It includes the basics of managing identities, understanding challenges in implementing IAM Solutions, harnessing IAM technology in the changing IT ecosystems.

IAM Implementation Challenges in Financial Services Industry
With cloud services as well as mobile apps as the go-to option for boosting efficiency, productivity and pruning costs, user identity management, together with accessing IT resources, has become a challenging and important component. The ever-changing IT environment must align with access for data and/or applications by partners, employees or other users accessing digital assets from multiple locations and devices, without having to compromise on the security issues. A few concern areas are listed as under:

  • One user – many devices – multiple applications usage has led to exponential Identity creation. Identity is no more about a user; it is about a user, the devices connected to a user and the applications accessed by a user through various assigned devices. This creates a conundrum of identities that grows exponentially. It boils down to the number of identities held by a single user, thereby creating multiple identities for monitoring, organizing, and access controls.
  • The creation of orphan user accounts means creating an identity without a defined owner. Users often make accounts in the systems without declaring a clear owner. Many cases were reported, wherein, an account belonging to an application is used only once a year, but was considered important. Most cases are regarding a person creating an account that remains inactive for a long time, but cannot be treated dead. Such orphaned accounts are often used to gain unauthorized access to a company’s sensitive data.
  • No clear procedure for monitoring user accesses. Monitoring of access should be strictly followed. It is a difficult procedure to follow, which often leads to hackers gaining access to unmonitored users, apps or processes. This also results in an inconsistent report of IT audits and created complexity in achieving compliance to relevant regulations.
  • Patchy control of privileged accounts leads to data breaches. Another important issue is the lack of control over privileged application access. This may include accounts of super-users, as these accounts may be easy to locate within an organization, and very crucial to keep a tab on accesses made through these accounts. This is all the more important in a scenario, wherein, temporary permissions are allocated to users, and revoking the access is not executed. Abuse of privileged accounts is a major cause of data breaches in big organizations; as such accounts help hackers in bypassing and breakthrough firewalls.
  • Users are provided with accesses that are not required. It has been observed in many situations that individuals are given access to information or data they might not need. Providing access to data that are not needed by a user increases the chance of data theft and misuse of user access. A defined process should be followed and enforced to ensure that the systematic flow for accesses is maintained in all situations.

Conventional Approach to IAM Integration
An IAM system is a framework that helps businesses manage electronic identities in a secure manner by initiating, capturing, and recording user identities, along with providing automated access permissions as per user role. It ensures granting access privileges as per business policy, which includes that the users are audited, authenticated and authorized properly. Given the complexity of accesses, identity authentication and governance requirements, it is apt to say that a poorly integrated IAM Solution and associated tools may lead to various IT-related vulnerabilities. They could be in the form of data security, information governance, cyber theft and complexities related to identity dynamics. The Financial Services industry is especially seen to be integrating IAM solutions into their systems to deal with emerging regulatory changes, addressing non-compliance issues, along with data breach curbs.

Here’s how conventional IAM solutions integration helps in securing IT Systems in Financial Services Industry:

  • Provision access to the right set of applications, data sets, or information repositories. Managing the assignment of users securely, especially in cases where the business has been trying to meet the demand from the customers and changing as per technology upgrade. Granting access to the right set of applications helps in bringing efficiency in workflows for financial organizations.
  • De-provisioning, i.e. user’s access revoked upon termination from the role. It helps in eliminating security gaps as well as policy violations that can occur after an employee is out of the organization. This discourages anyone to take information out of the system once an employee of out of the role. It is a crucial capability, given the model and information available in financial enterprises.
  • Ensure robust privacy controls through Segregation of Duties (SoD). Given the nature of information and data utilized in the financial services sector, it is imperative that excessive system access is discouraged. Such a practice might allow the person to execute transactions across the spectrum of an organization which can cause irreversible damage, leading to higher chances of fraud and data theft. Implementing SoD ensures that an employee or user is not granted authority to execute two or more conflicting sensitive transactions that might impact financial processes such as balance sheets or statements and such an activity is escalated.
  • Create uniformity in the access policy. IAM provides enforcement and administration of access policies across common users over various systems, thereby helping organizations to effectively comply with the policy requirements. In a financial services enterprise, lack of uniformity in access policy creates significant risks, cost impact and resource effort during an audit. It is required to address these issues as well as step up for security review and compliance audit too, which could be taken care of with the implementation of IAM.
  • Assign verified access rights. IAM systems provide the capability of assigning access rights in accordance with corporate policies, which could be verified periodically as well. Financial services enterprises are required to comply with various regulatory requirements and need to securely manage the task of assigning user access rights. A robust IAM for financial institutions enables a greater level of control while receiving provisioning access, which in turn ensures regulatory compliance and lowering policy violation risks. Through IAM, verification of access rights on a regular basis, for access audit compliance can be executed.
  • Manage access as per the business role. Auditing and provisioning the access as per business role rather than IT access provides higher authenticity to the enterprise overall. In financial services set-up, role-based access control helps improve the operations and increase return on investments as well. Further, integration of IAM helps in assessments of compliance on a periodic basis. Applying principles of role management, the process of re-certification could allow managers for working on the business role accurately and quickly.
  • Generate automated reports. IAM system can provide an ad-hoc and timely compliance report that includes notifications regarding violations, workflow processes, and assessment reports based on thorough audits reports. It also generates a comprehensive audit and process report, across applications, users, devices and multiple IT systems across an enterprise.

    Integration of IAM solutions in a financial services environment provides greater control to organizations to streamline onboarding, termination of employees and seamlessly undertake identity change management processes. Further, it enables standard approval workflows and creates an access review platform as well. A robust IAM system guarantees greater visibility into user accesses, policy compliances, role management and risk assessment, with the provision to conduct periodic reviews of all the accesses across the system.

    IAM for Financial Institutions in Current IT Environment
    The financial services industry includes banking, insurance, risk management, wealth management, asset management, and others are monitored at the State and Federal levels. As per the financial services or banking institution’s structure and charter, it is subjected to various regulations. Until recently, regulatory changes – a few of them – were seen in General Data Privacy Regulation (GDPR), Sarbanes-Oxley Act (SOx), OMB A-123, Basel II, Consumer Privacy, Data Privacy, Check 21, Anti-Money Laundering, SAS 70, BSA, MiFID, PATRIOT Act, along with Reg NMS. With the implementation of IAM solutions, organizations are assured of fulfilling governance requirements such as policy enforcement, assessing risks, auditing compliance and reducing frauds. Further, with the evolution in digital technology, financial institutions are also seen to evolve their digital capabilities, especially harnessing app-based mobile activities. This is also leading to a wider need to integrate IAM capabilities that could be delivered to both mobile devices as well as mobile apps.

    Read more by downloading White Paper | Making the most of IAM Technology in Financial Services Industry

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