Security stops us from keeping up with boutique firms: NAB

Security stops us from keeping up with boutique firms: NAB

Summary: Although Australia's big four banks might be criticised for not keeping pace with some of the innovative financial services coming from companies like PayPal, NAB has said there are a host of different security challenges that it has to deal with.

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Security is always a concern among banks, but at the Trend Micro Evolve 2013 Security Conference, National Australia Bank (NAB) head of IT Security Services Andrew Dell highlighted why banks seem to innovate slower than boutique firms that set up shop with state-of-the-art security.

Dell said that while it is fine that the local financial services industry is seeing an increase in competition due to large, global financial players, there is also a challenge from smaller, niche companies that offer either financial services or services related to the financial market.

"They're basically large financial services companies, but they have a whole bunch of benefits — they're small, they're agile, and usually they've got greenfield IT equipment, so they're able to really think outside the square when it comes to radical new banking platforms or solutions or the services they can offer," he said, referring to companies such as PayPal, which was born almost as a consequence of eBay.

In contrast, Dell said that incumbent market leaders like NAB have many existing systems and services that also need to be maintained, in addition to any new innovative features that these younger players might bring, increasing the number of security challenges they need to meet.

"We need to come up with some tools and products to react to [our rivals]. There's a sudden and urgent need for us to develop some new, competitive solution, [but] the challenge for us is the security function — how do we keep that safe?"

And simply outsourcing the development of any new financial services is a potentially rocky road, he said, warning that there are plenty of soft targets in an organisation's supply chain that hackers could target.

"We think we've got a pretty good handle on our immediate third parties ... but the challenge is, what about our provider's providers, and our provider's provider's providers, because that's more likely where the threat is going to generate from."

Dell said that within the bank, its operational security governance team has grown fourfold in size in the past year, mainly due to transformations that the bank is going through.

"We need to find that balance between governing and assuring ourselves of the posture and threats posed by our third parties, not from a malicious perspective, but just by the very nature of the relationships that we have with them, and the types of interconnectivity between our systems and theirs."

Topics: Banking, Security, Australia

Michael Lee

About Michael Lee

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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  • SLOW TECH BANKS NAB

    My first job was at the ANZ Bank in 1971 the year they took over the E.S & A Bank which until the ANZ Bank took it over was still using ledger cards printed by teams of girls in back rooms of the major city banks. The ANZ Bank was ahead having just been computerized 42 years ago and yet still we have to wait from 3 business days or up to 13 days over Xmas to clear even same bank cheques.

    So why is the NAB still coming up with excuses ? I'll put it down to ...it does not suit them to make it easier for its customers to do business and what they also telling us they have a deal between the banks which says they wish to resist change which might make them lose other advantages of keeping the old technology. IMO if other start ups can do it, then the banks can do it too otherwise they admitting entering the dinosaur age.
    KING Gilbert de St Arnaud