Interview: Jaime Peláez of Internexa Says Colombian Banks Face Enormous Challenges to Improve Security

Hardly a week goes by without a major data breach or cyberattack hitting the banking industry. Such security problems have only compounded the other technological challenges facing a sector that is racing to offer customers the digital offerings they now demand and upgrade legacy systems.

Few in Colombia understand this challenge like Internexa. The Medellín-based company, which has a large-scale communications infrastructure that includes nearly 50,000 kilometers of fiber optic cables, specializes in providing networks and services for telecommunications firms and those in the energy sector.

Internexa also offers data storage, network security and management, and disaster recovery services from its data centers, including a recently announced site within Bogotá’s “zona franca.” With operations spanning Colombia, Brazil, Argentina, Chile, Peru, and Ecuador, Internexa can bring its cable, internet, mobile, and other telecommunications and IT support services to nearly the entire continent.

Photo: Jaime Peláez of Internexa spoke to Finance Colombia during the Asobancaria 2017 financial conference in Cartagena, Colombia. (Credit: Internexa)

“That data — the most important asset for organizations — is always protected,” said Jaime Alberto Peláez Espinosa, general manager of Internexa, after his company unveiled its new data center in the Colombian capital. “At Internexa we have all the infrastructure, service, solutions, and the care model necessary to guarantee maximum quality, security, and confidence in our service.”

To shed more light on the latest cybersecurity and technology issues facing the banking sector in Colombia, Peláez recently sat down with Finance Colombia Executive Editor Loren Moss. The following is their conversation from the recent Asobancaria 2017 financial conference in Cartagena.

Loren Moss: Is security still biggest tech challenge facing banks and the rest of the financial sector in Colombia?

Jaime Alberto Peláez Espinosa: The Colombian financial sector — and in general in the world — has to face a very important challenge: assuring users that it has strong security. More and more, the financial entities are feeling the security problem worldwide.

They have to seek mechanisms that will allow them to not only regulate their own information but also their clients’ information. For their part, the clients also have to find ways to become better trained and understand that the internet market, where many financial transactions now take place, is a market that has vulnerabilities. It is necessary to control these vulnerabilities through mechanisms like using good antivirus software and conducting transactions from a safe place.

Loren Moss: Overall, how do Colombian banks compare with their neighbors in other parts of the world as far as their level of technological sophistication?

Jaime Alberto Peláez Espinosa: Colombian banks are quite modern and quite up to date at this time in Latin America. Colombia is a country where banking has a lot to show for itself in the transactional area. This also applies to the area of automation when it comes to the payment of taxes, credit cards, school fees, condo administration charges, telephone service charges, etc.

The banks are modern, efficient and fast. They have reasonable rates for their customers, and they are very competitive at the international level. A Colombian bank wouldn’t have anything to envy about any first-rate bank at the international level in what it offers the market in the area of technology.

Loren Moss: Those are their strong points. What are the areas in which they most need to grow? Where do they most need to modernize?

Jaime Alberto Peláez Espinosa: I think that it’s in everything that has to do with the portfolio of investments. In that area, there are banks that are more advanced than others and offer online transactions on the stock exchange to make them more efficient and less expensive.

I think that the package — the product that the market needs — still requires much more sophistication and requires, above all, more education of the user. In Colombia, people don’t have a high enough level of education to make an investment in a commodity or to make an investment in shares or to make an investment in real estate.

Loren Moss: Or futures contracts.

Jaime Alberto Peláez Espinosa: Futures contracts. All those kinds of things. They don’t yet have that education. So, I think that banks have an enormous challenge ahead to find an easy and simple way to educate people. Now, the millennials are coming out with much greater knowledge in that sense, and probably they’re going to be the users in the immediate future, right? And for that, they’re going to have to offer a very complete portfolio.

Loren Moss: That’s true. And we have seen a famous attack a short time ago, WannaCry, and it was conducted with ransomware. They were setting up the machines and making you pay to regain system access.

Jaime Alberto Peláez Espinosa: Kidnapping the machines.

Loren Moss: Exactly, exactly. It seems that there is a technical challenge, but there is also a challenge in educating the consumer about not downloading unknown files that may contain exploits.

Jaime Alberto de Jesus: You said it. I’ll tell you, the financial entities in the world have an enormous concern for guaranteeing the security of their applications to control attacks as far as possible. What is lacking is for the user to operate in a safe way.

What does that mean? He should be in a safe place, and his computer or device should have up-to-date software and a good antivirus software. And above all, the user shouldn’t be downloading things in a public place, because public places are much more vulnerable.

Loren Moss: That’s true.

Jaime Alberto Peláez Espinosa: So, in that respect, the banks have an enormous challenge to teach and train people to do this. But just that is not enough. You are constantly being bombarded by emails with phishing schemes, where they are trying to capture your information. And with that information that they capture, they are looking for ways to get into your webpages, to block your pages or to use ransomware and then later kidnap of your information.

There, too, people have to be very prudent when they get an email. They must know when to not answer it. Or when they do answer it, they must know what information to include.

And finally, passwords must be stronger. Usually, when you create a password, you create it with your name or with your pet’s name or with your ID number. These are very simple, unsophisticated passwords. All of us internet users have to learn to create better passwords.

That’s why there are free tools on the internet to help you to encrypt passwords and make them much more sophisticated. These tools insert special characters so that the passwords become much more difficult for the hacker to exploit to access a network and steal information. Because if you make your password with your name — if you make your password “Loren123” — it’s going to be too easy.

Loren Moss: The worst password.

Jaime Alberto Peláez Espinosa: That’s the worst password there is. So, if you make up a password that’s a bit more intelligent, less logical to your modus vivendi, it will a bit more difficult to hack.

Loren Moss: What other types of technology-related challenges are banks facing? Not just in Colombia but across the world?

Jaime Alberto Peláez Espinosa: The banking industry in general is starting to face new competitors. And these new competitors are handling a lot of resources. Those new competitors are the new retail warehouses and social media pages themselves, like Facebook.

Facebook recently took out a license to become a bank in Spain. Why? Because it is a company that handles enormous quantities of financial resources and can benefit by using them for lending. They don’t necessarily have to go to the banks coffers. Rather, they themselves can become a bank because of very high liquidity.

The same thing happens with retail stores. They are seeing themselves more as their own brand in everything: their own card and their own financing — with very interesting characteristics for users. They can offer very good coverage and terms to finance a whole line of products.

Banks may want to make good alliances with those businesses or seek mechanisms that will let them differentiate themselves from what others may be offering nowadays.

This interview has been edited for space and clarity.