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Cybersecurity in the financial world, particularly in Latin America, which has become much more technical and has expanded beyond just banking, will be the focus of a two-day conference next month in Miami held by an international banking organization.
With the fist of silicon-powered technology, the Florida International Banking Association (FIBA) has kept its acronym but changed its meaning to the Finance and International Business Association.
President and CEO David Schwartz explains that the reason is “an increasing number of banks embracing innovative financial technologies.”
Additionally, Schwartz told Miami Today that the association is “growing its membership of technology companies, software providers, law firms, accounting firms and others.” The name change for the 45-year-old Miami-based association comes into effect in 2022.
As a result of this voluntary diversification, “we’ve become very active in the technology space,” Schwartz explained.
“In a month from now, we’ll be sponsoring a cybersecurity conference” on July 8th and 9th at the InterContinental Miami Hotel.
Attendees will include bank executives, of course, but also, according to Schwartz, “chief financial officers and chief information officers,” “technology security officers,” and representatives from the Federal Reserve and the Department of Justice. Participants will be examining new types of financial criminals.
“There have been some recent changes to Florida law,” Schwartz explained, “that could have a significant impact on the financial services industry with regards to whose accounts financial institutions can close and who they can refuse service to.”
“This is an initiative that started in Tallahassee last year,” where the Legislature established that “banks can’t just close accounts, they have to use certain methods that are prescribed by law, and every year the banks have to certify that they’re following the law.”
“This year, the bank has gone further,” he said, “establishing a process in its customer complaints policy that says if a bank closes a customer’s account, the customer has the right to file a complaint against the bank with a state regulator, after which an investigation is launched and the bank has to justify to the state regulator why it closed the account.”
Florida Assembly Bill 585, which goes into effect July 1, “will require Florida’s state-chartered and state-licensed financial institutions to file access termination reports with the Florida Department of Financial Regulation whenever they take similar action to terminate, suspend or limit a customer’s account access,” according to a report by Miami-based law firm Greenberg Traurig.
According to the Regulatory Counsel Coalition, under Florida House Bill 3, banks and other financial institutions in Florida “are no longer permitted to consider environmental, social and governance factors in their decisions to offer or deny services.”
The coalition said these comprehensive legislative changes and insurance oversight actions are intended to “address Florida’s litigation environment, strengthen its economic position, protect consumers, and continue efforts to stabilize the state’s property insurance market.”
During these lawless times in the banking industry, financial institutions were attracted to FIBA.
“Banks close accounts because they may not be able to do business with certain types of customers,” Schwartz told Miami Today, “especially small and mid-sized banks, because they don’t necessarily have the expertise in that area.”
“And then there are groups of customers that are designated as high risk by Treasury regulators, and banks probably aren’t going to be seriously concerned with those high-risk customers.”
But now, financial institutions afraid to pull the trigger “can’t just shut down or refuse service to those people without a good reason. It’s almost like the banks have become utilities, right?” Power companies can’t just cut off the electricity on a whim.
For the upcoming two-day security conference, experts from around the world have booked rooms at the InterContinental Hotel Miami downtown, which, at least for now, is offering one night free when you book two.
“The conference is focusing specifically on Latin America because these regions are extremely vulnerable. Cybercriminals are always looking for the weakest entry points, and some of these countries have challenges in terms of defensive infrastructure,” Schwartz explained.
“Banks are doing a very good job,” he added, “but we’re rushing ahead with these new technologies, these innovative technologies.”
In Frank Capra’s classic film, It’s a Wonderful Life, a panicked Uncle Billy discovers that he’s lost that day’s receipt from Bailey Savings and Loan, wrapped in a newspaper, when he goes to make a deposit. Today, it’s as easy as Mr. Potter picking up the newspaper stuffed with cash and having his henchman wheel him out of the bank in a wheelchair. Now, the possibilities are endless.
“Digital banking customers don’t go into a branch anymore. They do everything online, so how do you know if you’re actually interacting with them?” asked Schwartz, the former lawyer.
“Did you know that we now have technology that can replicate your voice or mine in 15 seconds?” he asks rhetorically. It’s a battle between consumer convenience and criminal machinations.
For example, Facebook ads feature testimonials and images of Kevin Costner and Denzel Washington praising a miracle cure for tinnitus, all of which were generated by AI.
“So even if you think you’re talking to a customer on Zoom or something, they may not necessarily be your customer,” Schwartz argues.
“This has been a focus of the meetings,” he added, “because this is a major concern and there have been several meetings to address this issue, not just with the banks here but with regulators in Washington, with the Treasury Department and even with the White House.”
“Again, technology is advancing so rapidly, and we don’t have all the controls or guardrails that we need to protect ourselves. Latin America is one of the most vulnerable regions in the world right now. The problem is, they have incredible access to the internet.”
“I’m giving a presentation on this in the Dominican Republic next week, where we have a much higher percentage of people who have access to the internet and who transact online, which makes them more vulnerable. Because if you’re doing this at home, what firewall do you have to protect your data?”
FIBA’s membership is growing, “including financial institutions that don’t have physical locations in the United States.”
They are outside the US, but they come to us.
“We do a lot of education in Latin America on a variety of subjects, including regulatory compliance, communications banking, cybersecurity and sanctions.”
FIBA Miami is located at 80 SW Eighth St., Suite 2170. Schwartz said they outsource some of their work, but the staff totals eight people, including Schwartz.