Cyber Security in FinTech: Keeping Pace with Tech Innovations
Despite fintech’s rapid growth, its reliance on online platforms makes it particularly exposed to security violations. A number of U.S. companies (Equifax, Yahoo, Uber) have been targeted by cybercriminals, assuring fintech start-ups that they are even more vulnerable and need to be vigilant. Since fintech companies manage so much sensitive data, it’s extremely important to ensure that systems are secure from the start.
Fintech business models face some surprising statistics regarding their security. The world’s top 100 fintech start-ups are vulnerable to web and mobile application attacks even with them being well-funded. Likewise, one study reported that all fintech start-ups have misconfigured web applications, application program interfaces (APIs), and subdomains.
Before investing in a fintech company, or during your fintech startup idea validation investors may want to assess the company’s data protection and cybersecurity practices, which provides even more incentive for fintech start-up ideas to prioritize cybersecurity in their business plan.
What are some of the most serious threats that fintech businesses face?
Despite their fast expansion, the greatest dangers to fintech companies’ continuing success are security and privacy. Fintech firms frequently have access to very sensitive information about individuals and businesses, including social security numbers, credit card information, net worth, and income. As more data is made available in digital formats, it becomes more vulnerable to security breaches. Professional and amateur hackers have both set their sights on the rich financial data held by banks, brokerages, financial advising firms, and other financial institutions. They understand that one successful breach is all they need to make a sizable profit. The development of fintech has only provided hackers with more opportunities and access to financial data, making start-ups one of the most vulnerable industries to cyber-attacks.
Fintech implementation interacts with banks, financial service providers, and fintech enterprises, posing a security risk when data elements pass across these interfaces. Some of the most severe dangers are as follows:
- Malware attacks: Vulnerabilities that are easily exploited are common, and hackers take advantage of these flaws by launching malware attacks.
- Data leaks: Automated systems that interact with fintech service providers are particularly vulnerable to data breaches involving sensitive financial information (payment card info, user credentials, etc.)
- Cloud environment security risk: Payment gateways, digital wallets, and secure online payments are just a few of the specialized cloud computing services available in the financial industry. Due to a lack of proper cloud security safeguards, this sensitive data may be compromised and corrupted.
- Critical system availability: Any system failure can be disastrous for fintech organizations — 99.999 percent uptime isn’t good enough. Apart from the security concerns, downtime can cost a corporation millions of dollars, especially during market hours.
- Application security risk: Because of the vulnerabilities buried in their design and coding, applications are always preferred attack vectors.
How can you protect your fintech service provider from cyber threats?
The frequency and gravity of threats to fintech businesses necessitate the highest level of readiness feasible. This necessitates a cybersecurity plan that combines cutting-edge knowledge, cutting-edge tools, and a seasoned cybersecurity workforce.
Governance technologies such as Data Loss Prevention, File Level Encryption, and other integrity measures must be included in the approach.
An expert team of watchful defenders with the ability to protect your data and reputation is the most important cybersecurity defence. Fintech businesses that fail to have a full-fledged, robust cybersecurity solution will continue to be vulnerable. Hiring an in-house cybersecurity specialist isn’t always a viable option. Partnering with a managed security service provider is the greatest approach for financial companies to defend themselves against the onslaught of cybercrime (MSSP).
Fintech firms that believe they have a solid cybersecurity strategy in place might hire a third-party to conduct Red Team assessments to test the sustainability of their cybersecurity programmes without the advantage of inside knowledge or blinders. Red Team evaluations will put your program’s skills to the test in the face of assault scenarios, allowing you to fill in the gaps in your current plan.