How blockchain technology is changing the security landscape in the banking sector
Blockchain, the technology that is used in the popular cryptocurrency 'Bitcoin', is revolutionary in many ways. It addresses multiple challenges associated with digital transactions, such as double spending and currency reproduction. Employing blockchain also reduces the cost of online transactions while simultaneously increasing authenticity and security. The upshot is that the need for payment processors, custodians, and reconciliation bodies is eliminated. These benefits are amongst the prime reasons why the technology is being extensively deployed within the banking sector.
But, quite interestingly, the merits of blockchain technology are not limited to securing digital transactions alone. The IT infrastructure that is used to process digital transactions also benefits immensely from blockchain deployment, which offers multiple cybersecurity advantages to banking applications. Here's a look at how this happens:
A blockchain is a series of blocks that records data (financial, in this case) in hash functions with timestamp and the link to the previous block. These blocks are anonymously stored with other stakeholders within a network. This eliminates centralised points of vulnerability which cybercriminals can exploit. Moreover, previous blocks cannot be overwritten in a blockchain and all transactional data is verified with every relevant stakeholder, making data manipulation is extremely impracticable.
Blockchain technology is being used to protect sensitive records and to authenticate the identity of a user. Keyless Security Infrastructure (KSI) stores data hashes on blockchains and runs a hashing algorithm for their verification. Public Key Infrastructure (PKI), an encryption approach which is particularly vulnerable to man-in-the-middle and DDoS attacks, is therefore deleted out of the equation. Any data manipulation can be easily spotted as the original hash is available on other nodes linked to the system, enabling banks to go beyond asymmetric encryption and caching in public keys.
Simple logins and centralized IT infrastructure are also some of the biggest vulnerabilities that banks face. End-user protection becomes an especially daunting task, given that - despite comprehensive cybersecurity - weak passwords often give cyber attackers an opportunity to penetrate the network infrastructure. The deployment of blockchains enables authentication of users and devices without password protection; the decentralisation of the network helps in generating consensus between different parties for verification through blockchain-based SSL certificates. The distributed and decentralized nature of the network that verifies the integrity of the transactions and associated account balances makes a successful attack mathematically impossible."
This delinks the human factor from the security of banking operations and provides strong authentication. It also facilitates speedy identification of the point-of-attack in case of a network security incident.
Certain block-less distributed ledgers are additionally enhancing structural security of IoT devices. Devices in such network environments can recognise and interact with each other in a peer-to-peer manner, without the need for a third-party authority. Complemented with two-factor authentication, this offers unprecedented security to the network infrastructure and makes it impossible to forge digital security certificates.
Blockchain technology can also play a pivotal role in securing internal communications, which are prone to data leaks and cyberespionages. End-to-end encryption fails to cover the metadata - something which can lead to leakage of sensitive information. In blockchain-based systems, the metadata used for communications is scattered in the distributed ledger and cannot be collected at one centralised point.
Blockchain has emerged as one of the most disruptive technologies and has minimized the prevailing security issues in financial transactions. As other viable implementations for the technology are being explored, blockchains are coming to fore as top-contenders for solving an array of cybersecurity challenges and providing end-to-end security to banking institutions.
Though blockchain has several advantages over other systems, there are still a few challenges in terms of compliance, regulations and enforcement that will need to be addressed. For example, regulatory issues demand clarity over jurisdictions and how to comply with KYC (Know your customer) and AML (anti - money laundering) laws. But, the increasingly growing demand and acceptance by enterprises would help overcome these challenges sooner than anticipated.
Sunil Gupta, President and Chief Operating officer at Paladion.
Ireland is key launchpad for US expansion into Europe
The first transatlantic cable was laid between Newfoundland and Valentia Island in County Kerry, Ireland, in 1858. It was a flawed effort; the connection was poor, causing enough issues with efforts to send telegrams along it that major repair efforts were set underway immediately - efforts which ended up further damaging the cable line, severing the connection just three weeks later.
This first step towards transatlantic subsea communication, shaky as it was, laid the foundations of more than a century and a half of information exchange across the ocean, between the East Coast of North America and Western Ireland.
It’s been 163 years since the completion of the first transatlantic cable, an event which cemented Ireland’s position as the landing stage for subsea connections between Europe and the Americas. That position has, in no small way, been a driving force behind the country’s modern role as a landing stage for US and Canadian firms looking to do business in Europe.
Today, some of the largest firms in the world, like Pfizer, Janssen, Zurich, Metlife, Google and VmWare use Ireland for their European Headquarters. The combination of an English-speaking workforce (a boon made all the more important as Brexit makes the UK and the north of Ireland an increasingly complex environment that provides diminishing opportunities to access the rest of Europe), a cultural and regulatory landscape that welcomes foreign investment, and world-class connectivity makes the country an unparalleled choice for firms looking to establish a foothold in the EU.
As a result, Ireland has become one of the world’s leading data centre hubs.
Based on leading data centre firm Interxion’s Data Gravity Index, Dublin will be among the top five European cities that will contribute to Europe’s growth in data in the coming years, following London, Paris, Frankfurt and Amsterdam. The amount of data generated in Dublin itself is expected to grow alongside its economic expansion, with the Data Gravity Index also predicting that Dublin will outpace cities and data centre hubs like Mexico City, São Paulo, and even Shanghai, to be among the top 20 cities to experience annual data growth by 2024.
Ireland ranks 6th in the 2020 EU Digital Economy and Society Index (DESI), meaning that it is among the leading ranks of EU Member States in terms of the uptake and use of digital technologies. Likewise, the trend to locate data centres in Ireland serving overseas clients will continue to generate increasing amounts of international traffic
Managing the Dublin Data Boom
According to Interxion, subsea connectivity will continue to play a massive role in helping both international and domestic organisations digitally transform themselves to meet the challenges of changing markets post pandemic.
As the pace of global digital transformation - and the subsequent need for more connectivity - accelerates like never before, this rapidly developing world is driving urther demand for these cables as individuals and organisations become increasingly reliant on subsea cable’s exceptional data speed and capacity.
According to experts at Interxion, this connectivity will be pivotal to Ireland’s continued success in attracting international companies in the technology, pharmaceutical and financial sectors.
The subsea cable industry is a key contributor to the Irish economy across many sectors. The draft National Marine Planning Framework reported that subsea international networks make Ireland an attractive region for investment for the technology and digital sectors. Telegeography states that there are twelve existing subsea cables connecting Ireland to the US and UK, and a further four systems are under development. The Iish government’s statement on the Role of Data Centres in Ireland’s Enterprise Strategy identified Ireland as a location of choice for many different sectors reliant on digital and telecommunications capabilities, all of which in turn rely on subsea cable interconnectivity.
Subsea cables are of strategic importance to Ireland’s future as a catalyst for economic and societal prosperity. Ireland can be the ideal location for your company’s expansion plans. To find out how, you can hear from leading experts throughout the data centre and digital infrastructure industries on June 15, 2021, as speakers from the IDA, Aqua Comms, GTT Communications, euNetworks and Interxion discuss subsea cabling, digital transformation, Data Gravity and the fate of Ireland’s digital economy.
Key topics will include:
- Key facts about existing subsea infrastructure,
- Future plans,
- Challenges (including Marine Maintenance) and opportunities,
- Terrestrial networks (demand vs supply);
- Ireland's role as a gateway to Europe
The virtual panel (which is taking place between 10:30 PM - 11:30 PM JST on June 15, 2021) will conclude with a 20 minute Q&A. Mike Hollands, Senior Director of Market Development at Interxion, will moderate the event.