The new banking paradigm to ensure cybersecurity and competitiveness
The growth of fintechs in Latin America forces traditional banks to take advantage of technologies such as cloud computing and artificial intelligence to stay relevant.
Safety is a key concern in this process, Diego Raúl Schargorodsky, Globant's managing director for South America, told BNamericas in this interview.
Globant assists companies like BBVA, Prisma and Santander in their digital transformation.
Schargorodsky talked about the backseat security is taking in many companies’ process improvement and how banks should compete against fintechs.
BNamericas: How can technology help banks compete with fintechs?
Schargorodsky: The application of technology in different industries aims to understand people's behavior and streamline processes to offer solutions that improve daily lives.
Fintechs understood this perfectly and with artificial intelligence as their main ally, they have grown. In Chile, for example, this market grows at rates of 38% per year.
The Chilean banking sector must face the challenge of using AI in different processes to continue adapting to the era of hyper-personalization and fundamentally to provide a competitive advantage in the industry. In this way, some entities already offer tools to detect the identity of a person based on the speed with which they write, create an identification onboarding with ID photos or develop credit analyses based on big data.
On the other hand, technology is vital to protect users, and banks must understand that this is invaluable. In times where alternative digital investment instruments continue to grow, cybercrime skyrocketed 37% in the first half of 2021 in Chile. In this sense, banks have to invest in cybersecurity systems that shield users so that they feel protected.
BNamericas: And how can technology help prevent fraud?
Schargorodsky: In a context where users have many financing options, security is a very important differentiator because trust determines whether the person chooses one alternative or another. Banks must move toward a new paradigm that encourages accompanying digital transformation with cybersecurity innovation to create a protection strategy throughout the life cycle.
Through questions, scans and aggregated identity information corroboration, thousands of cases of possible theft can be avoided.
Although Chile has a national cybersecurity plan, it has a long way to go, so much so that according to an Entel report, less than 38% of organizations have adequate cybersecurity policies.
BNamericas: A recent report by Grant Thornton in Chile indicated that much of banks' technological infrastructure is 15 years old. What about the rest of the region?
Schargorodsky: Although Latin America does not have the digital ecosystem infrastructure as Europe or North America, the trend toward putting technology as the core of business in different industries is strong. Obviously there are sectors where the application of IT takes longer than in others due to cultural reasons, but the region is increasingly scalable in this regard.
In Latin America, banking is one of the strongest industries in these terms and is being encouraged to take even bolder steps. Illustrative examples are fully digital banks, such as Nubank in Brazil, or those options that allow opening an account with only facial recognition.
BNamericas: What are the advantages and disadvantages of banks’ migration toward cloud computing?
Schargorodsky: This has to do with the new paradigm that we propose: innovating in processes and security mechanisms. Migrating to the cloud has really important advantages in terms of efficiency, business development, cost reduction and scalability.
However, if secure interfaces are not developed in this cycle, the system is likely to end up being compromised by hackers who spend more and more time improving their practices. If this hypothetical scenario materializes, users and entities may lose large sums of money.
Gloss