How stakeholders navigate risks from supply chain attacks and third-party collaboration was the central topic explored in the opening keynote at the Fintech Talents & Future Identity Festival 2022 in London on November 14.
The session, 'accelerating innovation in financial services', featuring speakers Prakash Pattni (managing director, Financial Services Digital Transformation, IBM Cloud at IBM) and Layla White (founder and CEO, TechPassport), began by explaining that the competitive landscape between banks and fintech is more dynamic than ever.
As banks and fintech innovate across spheres, risks from supply chains and third-party collaboration increase. "How are stakeholders navigating this problem while accelerating innovation in financial services?" queried Pattni.
Startups and third-party providers are being contacted by financial services organisations to solve problems through innovation, he explained, but security and speed pose challenges.
As the number of vendors in the digital supply chain increases, so does the surface area of attack and risk of vulnerabilities, detailed Pattni. On the other hand, while financial institutions desire to deploy startups, the onboarding process could be "too long", he added.
Banks, reliable institutions with large customer bases, possess an in-depth understanding of security and compliance, explained Pattni.
"The agile fintech sector, on the other hand, can efficiently test out new markets and drive innovation faster. The answer lies in the whole being more than the sum of its parts".
IBM is helping tackle this problem by working with organisations that are standardising and streamlining legal and commercial friction points, explained Pattni.
However, addressing security and compliance challenges involves a multifaceted approach, he detailed.
Pattni further explained that the approach involves identifying the high-risk vendors in the supply chain, deploying vendor software on the cloud built for financial services, monitoring real-time with posture management tooling and conducting tests and documentation of the environment.
The steps are implemented to reduce repeat compliance work with each new financial services client, he highlighted, and deliver faster time to market and revenue.
White explained that the entire ecosystem must collaborate seamlessly for optimum results. "The benefits of the process are multifaceted, and commitment to work better takes the fintech pledge — launched by the UK fintech industry to improve the financial lives of people by 2025 — closer to the goal," she added. "Next year will be tough for startups. The key lies in being well-prepared when you are in talks with a financial institution. It is also vital to build regulation into your platform from the first day," advises White.
"Multi-cloud deployments require solutions that simplify management", concluded the panellists. At the same time, cloud credits offer "game-changing" financial incentives, and more prominent organisations should work towards simplifying operations for startups and fintech.
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