Navigating the current security landscape for banks has never been more complex. As cyber threats evolve in sophistication, banks must shift away from legacy mainframe systems and embrace modern, agile platforms.

This transition is not just about improving operational efficiency—though that’s a critical factor—but also about fundamentally improving security by leveraging integrated solutions designed for today’s risk environment. 

Given my own experience as a banking executive, including roles as a CISO and later a COO/CTO, I have seen firsthand the value of transitioning to modern cores with built-in security and fraud prevention technologies.

One of the most significant challenges in today’s banking environment is the increasing complexity and frequency of cyberattacks. Account takeover (ATO) fraud and synthetic identity fraud, for instance, have become more prevalent, putting both customers and banks at risk. Criminals are continuously finding new ways to exploit weak points in legacy systems, and traditional security approaches—such as relying on password-based authentication—are no longer sufficient. ATO incidents, often triggered by phishing and social engineering schemes, have surged over the past few years, contributing to a 90% rise in fraud-related losses in the banking sector in 2022 alone. In such a landscape, it is imperative for banks to adopt next-generation platforms that can offer deeper, more integrated layers of protection.

Modern, non-mainframe-based platforms present a significant opportunity for banks to tackle the evolving cyber threats more effectively. By moving to flexible, cloud-based systems, banks can integrate advanced cybersecurity tools that utilize machine learning and behavioral analytics to detect anomalies in real-time. AI-driven solutions are especially useful for identifying the subtle signs of fraud, such as unusual login patterns or uncharacteristic spending behaviors, that human analysts may miss.

Moreover, these platforms enable the creation of “fusion centers” of excellence, which unite cybersecurity, fraud, and BSA (Bank Secrecy Act) teams under one umbrella. This type of cross-functional collaboration allows for more comprehensive threat detection and response. Traditionally, these teams have operated in silos, with the cybersecurity team handling external threats, the fraud department managing internal theft and fraud, and the BSA team focusing on anti-money laundering (AML) compliance. While each of these areas has been critical, the increasingly sophisticated and interconnected nature of today’s cyber threats means that these teams must work together to develop a unified defense strategy.

Synthetic identity fraud, for example, is one area that benefits from a collaborative, integrated approach. Criminals use combinations of real and fabricated data to create new, fraudulent identities, often slipping under the radar of traditional detection systems. Integrated security technologies, enhanced by AI, can compare patterns across datasets—flagging inconsistencies that might indicate a synthetic identity is being used. This proactive stance prevents fraud from escalating before significant financial damage is done.

Transitioning to modern banking cores is not just about preventing fraud—it also offers long-term strategic benefits. With financial institutions increasingly targeted, a bank’s ability to prevent major breaches can directly impact its reputation and regulatory standing. The costs associated with breaches go far beyond immediate financial losses; they often result in hefty fines, reputational damage, and increased regulatory scrutiny. Integrated platforms are designed to reduce these risks, helping banks comply with growing regulatory demands around data protection and cybersecurity without needing multiple, fragmented systems.

As we look towards 2025, banking executives should focus on cores with integrated security because of their ability to future-proof operations. 

By investing in systems that incorporate real-time fraud detection, multi-factor authentication (MFA), and machine learning capabilities, banks can mitigate the risks associated with synthetic identities and account takeover activities. These technologies also address some of the most pressing pain points for executives, such as compliance with evolving data protection regulations like GDPR, CCPA, and the new cybersecurity mandates introduced across various jurisdictions in 2023.

From my experience, the need to evolve is clear. As a CISO, I faced the growing pressure of defending against increasingly sophisticated threats with aging infrastructure. Later, as a COO/CTO, I understood how operational efficiencies could only be maximized if we had a flexible, secure platform that supported both front and back-end processes. That’s why transitioning to cores with embedded security and fraud tools should be a top priority for executives in 2025. It’s not just a matter of reducing cyber risk—it’s about enabling the bank to adapt to a constantly changing environment while maintaining customer trust and confidence.

In conclusion, the banking industry stands at a critical juncture. The complexity of today’s threats demands a move away from legacy systems to agile, secure platforms that can offer integrated defenses. Banks that fail to make this transition risk being left behind, both from a competitive and security standpoint. By focusing on advanced, secure cores that provide end-to-end protection and enable cross-functional collaboration, banking executives can better safeguard their institutions against the ever-changing security landscape, ensuring a stable and resilient future.

Want to discuss more about #BankingInnovation, #Cybersecurity, #FinTech, or #DigitalTransformation? Reach out and let’s explore.