The modern banking system is built on trust. When consumers deposit their money, invest in financial products, or agree to a loan, they need to know that the institution will act in good faith to protect their money and personal information. Without that presumption of security, the entire system comes crashing down.
And how do consumers know they can trust their bank or credit union?
Back when banking was primarily conducted in traditional branches, it was simple. You would walk into the branch and see lockable doors, armored vaults, and intricate alarm systems – all of which showcased the security of the facility.
But what about now, when financial institutions are transitioning to virtual tellers, mobile banking, and cafe-style banks in shopping centers?
These institutions still need to show that they’re trustworthy. They need to bring the sense of security that locks and vaults once provided and send it out into the world of distributed banking.
In effect, what modern financial institutions need is a system of “distributed trust.” This requires an IT architecture that’s built with non-traditional models in mind.
Below, we’ll describe how financial institutions can build a distributed trust architecture that actually works. Spoiler: It involves a unified suite of integrated solutions, not a mishmash of technologies haphazardly bolted together.
Trust Has to Be Engineered, Not Assembled
There are some things that can be constructed from a relatively random assortment of ingredients. Distributed trust in the financial services sector is not one of those things.
To build an IT architecture that establishes and maintains consumer trust in distributed settings, financial institutions must carefully engineer the right assortment of solutions that meet specific needs.
To illustrate this point, it’s helpful to think of distributed trust as a three-legged stool, supported by:
- Connectivity
- Security
- AI
For the entire apparatus to stand strong, all three legs must be sufficiently sturdy.
The Integration Point
If there’s one essential truth for tech in the modern financial services industry, it’s this: Integration is everything.
Standalone point solutions won’t be enough to provide connectivity, security, or AI operability. Furthermore, none of those three categories on their own is enough to provide a sense of distributed trust.
To illustrate the point, just imagine if any of those three “legs of the stool” were missing:
- Without connectivity, the most basic functions of modern banking break down.
- Without security, nobody would trust a connection, no matter how well it seems to work.
- Without AI, connections and security tools will be hopelessly outmatched by AI-enhanced cyber attacks.
You can’t bolt security tools onto an unreliable network any more than you can build a reliable AI tool into a system that operates with insecure data. All of these capabilities are inextricably linked. Together, they give financial institutions the type of robust, versatile IT stack that brings armored-truck levels of trust into the digital world.
Distributed Trust: The Three Legs of the Stool
To truly understand the nature of a sound distributed trust architecture for modern banking, it’s best to consider each “stool leg” in turn: connectivity, security, and AI.
Here’s a look at what each pillar delivers and, even more importantly, how they support the larger structure of the three-legged stool.
Connectivity
In the digital era, connectivity is a concern in almost every industry. After all, nobody wants to be interrupted by a sudden internet outage, even if they’re just ordering a pizza.
But in the financial services industry, connectivity is especially vital because it’s a source of consumer trust.
When people trust their money to an institution, they expect that institution to be a paragon of professionalism and reliability. An internet outage at an inopportune moment – when someone is trying to deposit a massive check or sign a mortgage agreement, for example – sends that appearance of professionalism crashing down, and the reputational damage can be permanent.
This need for consistent connectivity is complicated by the fact that, when launching non-traditional formats (remember those shopping center banking cafes), financial institutions are operating on network infrastructure that they don’t actually own. This places an extra burden on their own connectivity architectures, which should be wireless-first and redundant by design. It also highlights how security and connectivity are intermingled, with the right network infrastructure helping to mitigate the security risks of operating in public spaces.
Security
A financial institution’s cybersecurity infrastructure represents the digital version of the vaults and locks that have defined physical banks for generations.
These security measures don’t just protect customers’ assets and information. They also make customers feel safe. Sure, people might grumble about the annoyance of multifactor authentication when logging into a mobile banking app – but ultimately, when it comes to their finances, they’re happy to sense that security is being taken seriously.
Cybersecurity measures are especially vital in distributed and non-traditional settings. Financial institutions are relying on outside network infrastructure while sending agents out into the field with mobile devices. In this environment, the only safe option is to assume that networks and endpoints are exposed and respond by building zero-trust principles into the core of the IT architecture.
AI
In the financial services sector, AI is both a major threat and a tool for bolstering cyber defenses.
Threat actors are using AI to:
- Increase the specificity and sophistication of personalized phishing campaigns (which often target remote workers operating on mobile devices).
- Impersonate clients with deepfakes that can pass “know your customer” standards.
- Perpetrate fraud at a scale that was once unimaginable.
And how can financial institutions fight back? Largely, by using AI themselves.
AI offers a slew of defensive use cases, including fraud prediction, anomaly detection, and the automation of compliance-related tasks and risk monitoring. But to do all of this effectively, AI systems need to be able to rely on trustworthy data – which is why the connectivity and security components must be present as well.
Deploying AI within a larger IT infrastructure demands a cultural shift at the organizational level. It also requires a renewed commitment to savvy AI governance.
To learn more, visit our Financial Services Hub and hear from our technical experts around their keys to successful AI integration.
Hardware and Endpoints: The Physical Components
In the process of establishing a distributed, non-traditional banking model that relies on digital infrastructure, it’s important not to overlook the importance of hardware like ATMs, kiosks, and mobile devices. In reality, these physical components are even more consequential in distributed settings because they’re connected to a massive system of networks and digital assets.
As with networks, security solutions, and AI tools, hardware should be seen as part of a unified architecture engineered to sustain consumer trust. That means the interoperability of devices and physical assets with networks and digital systems should be assessed in the earliest stages of procurement. There’s no sense in purchasing tablets for loan officers if they can’t securely operate on a wireless network, just as an ATM becomes a likely attack vector if its data is improperly exposed via AI systems.
And how can a financial institution ensure that hardware and digital solutions integrate to form a unified, trustworthy architecture? By working with a trusted IT partner who can act as the professional architect.
Where the Sales Partner Comes In
To build a unified IT architecture for distributed banking, financial institutions need to identify and integrate solutions from a variety of suppliers in different sectors of the tech industry. For example, a company will likely have to source wireless network technology from one vendor, multifactor authentication tools from another, and AI systems from a third.
When all is said and done, a complete IT architecture for a financial services provider will involve dozens of IT solutions from ten or fifteen suppliers. And if any one of those solutions doesn’t integrate with the others, the entire infrastructure could collapse and bring customer trust down with it.
So the need is simple: A trusted advisor who has access to a wide variety of technology suppliers and knows how their products can fit together.
This is the perfect role for an Intelisys sales partner.
Sales partners bring three vital ingredients to the table:
- Access to the entire Intelisys portfolio
- Direct knowledge of how these solutions integrate
- The ability to call on our Intelisys technical experts to provide further insights and guidance
When this option is available, there’s no reason for a financial institution to stitch vendors together itself.
To learn more about building IT architectures in the era of distributed banking, download our complete e-book: Designing the Modern Bank.