The World Economic Forum (WEF) has created a new consortium to strengthen cybersecurity for FinTechs and data aggregators. The consortium, consisting of Citigroup, Zurich Insurance Group, FinTech lender Kabbage, Hewlett Packard, and financial infrastructure provider The Depository Trust & Clearing Corporation (DTCC), aims to create a framework for the assessment of cybersecurity in financial technology.
The consortium came about after leading cybersecurity experts convened by the WEF identified the growing threat of cyber attacks to financial services providers as a key concern for the global financial system. Their assessment and proposed solutions were published in a white paper, “Innovation-driven cyber-risk to customer data in financial services”.
“Cyber-risk is the number-one threat to the financial services industry and its infrastructure, so it is critically important that we work together to share insights and drive best practice,” said Mr Michael C Bodson, President and CEO of DTCC, and a founding member of the Consortium. “This initiative will further strengthen cyber-resilience and foster greater collaboration with our colleagues across the public and private sectors globally.”
Cyber breaches recorded by businesses have almost doubled since 2013, and the estimated cost of cybercrime is $8 trillion over the next five years, said Mr Mario Greco, CEO of Zurich Insurance, a participant in the consortium. “We expect the consortium to help adopt best cybersecurity practices and reduce the complexity of diverging cyber regulation around the world.”
Incumbents are increasingly linking technology companies to their system infrastructure – either voluntarily or as a result of regulation such as the EU’s Payment Services Directive 2 – making it crucial to have a reliable and objective cybersecurity framework in place. At the same time, the assessment will benefit new entrants.
FinTechs can only deliver on their customer experience promises if the financial system is able to manage the risks adequately, said Mr Matthew Blake, Head of the Financial and Monetary System Initiative at the WEF. “This consortium will offer technology companies a clear goalpost and thus enable them to implement sound cybersecurity measures at the product design stage.”
“Kabbage is joining the WEF consortium because cybersecurity is a never-ending, age-long issue that requires a long-lasting solution for tomorrow and not a band-aid for today. We need a living global standard that allows financial services companies to compete and work with incumbent institutions across borders and industries,” said Kabbage CEO Rob Frohwein.
The consortium will commence work immediately in close consultation with the WEF’s new Global Centre for Cybersecurity in Geneva, Switzerland. It will develop common principles for cybersecurity assessments, guidance for implementation, a point-based scoring framework, and guidance on improving an organisation’s score. M