The World Economic Forum announced the creation of a new consortium to strengthen cybersecurity for fintech companies and data aggregators. The consortium’s founding members include global bank Citigroup, insurance company Zurich Insurance Group, fintech lender Kabbage, infotech company Hewlett Packard Enterprise (HPE), and financial infrastructure provider The Depository Trust & Clearing Corporation (DTCC). The consortium’s aim is to create a framework for the assessment of cybersecurity in fintech.
“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,” stated DTCC, USA President and CEO Michael C. Bodson, 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.”
[clickToTweet tweet=”A group of financial service experts, convened by the World Economic Forum, proposes 19 solutions for cybersecurity threats, the number-one risk to the financial services industry.” quote=”A group of financial service experts, convened by the World Economic Forum, proposes 19 solutions for cybersecurity threats, the number-one risk to the financial services industry.”]
The consortium came about after leading cybersecurity experts convened by the World Economic Forum identified the growing threat of cyber-attacks to financial services providers as a key concern for the global financial system.
“Kabbage is joining the World Economic Forum 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,” explained Kabbage Chief Executive Officer Rob Frohwein. “We need a living global standard that allows financial services companies to compete and work with incumbent institutions across borders and industries.”
The cybersecurity experts’ assessment and proposed solutions can be read in the white paper, Innovation-Driven Cyber-Risk to Customer Data in Financial Services.
The cost of cybercrime to the global economy could go up to $500 billion annually, according to experts. In comparison, the annual GDP of Switzerland in 2017 is estimated at $659 billion. The World Economic Forum has recognized cybersecurity as one of the world’s most critical risks. In response, the new Global Centre for Cybersecurity will draw on the Forum’s government and industry support to work towards a more secure cyberspace through its established multistakeholder approach.
“Cyber breaches recorded by businesses have almost doubled since 2013 and the estimated cost of cybercrime is $8 trillion over the next five years,” indicated Zurich Insurance Group, Switzerland CEO Mario Greco, 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 European Union’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.
[clickToTweet tweet=”A newly-created consortium consisting of Citigroup, Zurich Insurance Group, Kabbage, HPE and DTCC will develop #cybersecurity assessment for fintechs and data aggregators.” quote=”A newly-created consortium consisting of Citigroup, Zurich Insurance Group, Kabbage, HPE and DTCC will develop #cybersecurity assessment for fintechs and data aggregators.”]
“Fintechs can only deliver on their customer experience promises if the financial system is able to manage the risks adequately,” opined Matthew Blake, Head of the Financial and Monetary System Initiative at the World Economic Forum. “This consortium will offer technology companies a clear goalpost and thus enable them to implement sound cybersecurity measures at the product design stage.”
The consortium will commence work immediately in close consultation with the World Economic Forum’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 organization’s score. It will draw upon a similar, domestic-focused project undertaken in 2017 by the US Chamber of Commerce on Critical Infrastructure Protection, Information Sharing and Cybersecurity.