Solving Enterprise Data Breach with Turnkey Neobank Solutions

Digital banking is emerging as one of the fastest-growing segments across the globe. The over $800 billion in revenue generated in 2018 is projected to grow at a CAGR of 10% over the next 5 years, reaching $1.7 trillion by 2026.

This rapid increase is drawing attention from enterprise stakeholders from within the financial services industry, in addition to well-positioned BigTech players and disruptive start-ups on the outside. Coupling this fact with the constant delivery of innovative products out of the tech space, it’s no surprise that the banking and financial services industry is facing such unprecedented disruption.

Companies like Amazon and Apple certainly present a threat to market share in the financial services industry, yet consumers are still most comfortable forming a relationship with an established bank. The pandemic certainly opened up the eyes of consumers and stakeholders alike to the capabilities of digital-only bank services, also known as neobanks , but large shifts in consumer behavior have yet to occur. Regardless, PYMNTS surveys show that consumers, especially those from the Millenial and Gen Z cohorts, are interested in adopting the kind of convenient service structure that neobanks provide.

There is one major impediment to the adoption of neobanks and the delivery of financial services from outside enterprise companies: security. Data breaches and instances of fraud occur within even the most established financial institutions, leaving little confidence in the ability of organizations to carry out these services without the proper infrastructure. Luckily, there are innovative firms using highly secure technology like blockchain and biometrics to help create neobanks providing both convenience and security.

Neobanking Innovations for Data Breach Security

It’s an issue that is unfortunately becoming all too common in the cloud era — the tradeoff of security for higher flexibility and user experience. Particularly on the enterprise level, the use of multi-cloud application environments is becoming a necessity, and that puts additional strain on DevSecOps teams. High-profile security breaches and cyberattacks, like the ones impacting JP Morgan Chase in 2014 or Equifax in 2017 , are an unfortunate byproduct of our digital era, and consumers are exceedingly wary of their financial relationships for this very reason.

To bridge the divide between convenient and secure operations, enterprises need to take advantage of FinTech solutions based on the latest digital technologies. Decentralized ledger systems, automated regulation, and the use of biometric credentials are three major systems that financial institutions, large enterprises, and innovative startups can leverage to improve security and consumer confidence. Here’s what you need to know about these powerful technologies.

Blockchain

Decentralized blockchain ledgers are finally emerging from stigmatization and relegation as a technology with extensive enterprise utility. Not only do they provide optimal security through the decentralization of data, but they are also capable of processing a high volume of transactions at an incredible rate. As governments and regulators across the globe continue to adjust their stance on blockchain, enterprises across different industries are investigating the use of this technology.

While many of the most widely acknowledged use cases or blockchain exist in the financial services sector, there are many other areas where it can be successfully applied to enhance security. From supply chain management to healthcare systems to media and entertainment, decentralized ledgers are highly applicable . But in terms of banking and financial services, it appears that blockchain is developing into a critical component of digital infrastructure.

Automated Handling

Human error during the handling of data and sensitive information is another pervasive security risk within financial services. Client and employee end-users inevitably make mistakes during critical steps of the banking process. In many cases the impact is small, but there are many instances of significant costs incurred by things as simple as clerical error .

Automation is emerging as one of the best ways to reduce the impact that human error has on data handling processes. From onboarding and authentication of users to various other administrative processes, enhanced automation within large enterprises is a key solution in our increasingly tech-reliant world. Monitoring transactions, assessment of risk variables, and regulatory compliance are all possible thanks to the automation of platforms.

Biometric Credentials

Biometric credentials, the login processes popularized by mobile phone and consumer electronics manufacturers are now being deployed for much more than just unlocking a device. Financial institutions commonly couple their traditional password logins with biometrics like facial recognition and fingerprint scanning, hoping that this combination will reduce the rate of security breaches. Unfortunately, these systems are still overly reliant on credentials and passwords, both of which are easy access points for nefarious actors and insider errors.

The latest iteration of access controls removes the need for usernames, logins, and passwords across all industries. In the retail finance and banking industry, this not only protects consumer savings but also greatly increases ease of access and conversion-rate success. Whether it’s securing the internal data centers within an enterprise or creating more secure and efficient entry protocols, biometrics are helping solve the data breach issue across financial services and neobanking.

One of the most important components of integrating a financial services platform with blockchain, automated handling, and biometric credentials is ensuring that the system meets all regulatory standards. At Optherium labs, we provide white-label turnkey neobanking solutions that are fully compliant with regulations across Brazil, the United States, and the EEA. From GDPR to PSD2 to PCI-DSS, our multi-decentralized platform allows companies of all sizes to develop and implement a secure, efficient neobank platform.

To learn more about how our blockchain-based solutions can improve outcomes for your financial institution, large enterprise, or capital-infused startup, contact Optherium Labs today!