Why Cybersecurity Should be a Priority for the Fintech Industry
The financial technology or fintech industry is evolving at breakneck speed. This is largely driven by the rapid adoption of new technology such as artificial intelligence and blockchain-powered assets. It is projected that the global market for fintech will reach 190 billion dollars by 2026. As fintech rapidly grows, firm owners may start to overlook important things for business operations such as cybersecurity. Many fintech firms view cybersecurity as an impediment to technology-driven growth which means they choose innovation over safety. This is the next article in our cybersecurity awareness month campaign. Read on to learn why cybersecurity should be a priority for the fintech industry.
Fintech organizations face a variety of threats from cyber-related attacks. They are especially vulnerable to targeted cyber-attacks where ransomware and artificial intelligence are used to steal employee credentials. These targeted attacks have broadened and diversified due to the use of mobile devices and remote work. Combatting cyber threats in the fintech industry requires a tailored cybersecurity program with a fully developed and practical response plan.
Why is cybersecurity critical with fintech?
Fintech companies often offer more flexible products and services than regular banks. Their legal regulations are modest, and they offer a shorter time to market. These two things are very important from a business perspective but sometimes this allows the fintech company to streamline their products or skip features. This results in some companies only partially securing their solutions and omitting important security measures when they don’t see the added value to their business.
Some fintech startups have also lowered their nonfunctional data security requirements because they have limited awareness on the importance of cybersecurity. They often operate under the conviction that fully secured products aren’t flexible enough from their businesses’ perspective. This leads to the fintech firm creating functional but very poorly secured products. This increases costs down the road when the security product needs to be resecured or fixed. This reflects poorly on the business because working with them may be riskier than a more secure global bank.
All banks, financial institutions, and fintech companies are at risk for cyberattacks. Fintech startups are particularly attractive to cybercriminals. The hackers know that these startups rarely invest money into security measures the way banks do. Fintech startups often make mistakes such as keeping data unencrypted or using unsecured third-party services. The most common attacks against fintech startups are the following.
• Identity theft that can lead to social engineering or phishing attacks
• Money theft and laundering
• Application breaches and data leaks
• Malware attacks
What happens when a fintech firm’s customer data is compromised?
One of the most important things a fintech firm can lose from a data breach is customer trust. This always leads to financial losses and because many fintech firms are startups, it is not a good way to start a successful business. There are also legal implications attributed to data loss from cyber breaches. Any GDPR breach is subject to large fines and may incentivize the affected parties to file a lawsuit. It is also common for the exposure to increase the chance of subsequent attacks, especially phishing attacks.
Best practices to avoid security flaws in the fintech industry
One of the best and easiest ways to lessen security flaws is to implement the secure-by-design approach into the software and product development process. This is best handled by a managed service provider such as Tekscape. We will integrate specific security techniques at every stage that includes analysis, design, implementation, testing, maintenance, and monitoring.
Easy ways to overcome FinTech cybersecurity challenges
When implementing a strong cybersecurity plan for any fintech firm, the following principles need to be practiced.
Know the assets that the firm has – There is a popular saying that you can’t protect what you don’t know. When starting the cybersecurity process, start by determining what the most valuable assets are. When this is determined, processes can be implemented which allows changes to be made easily and it also ensures that the assets are never exposed.
Practice good cyber hygiene in and out of the office – All cybersecurity measures, even basic ones are and always will be critically important. These practices should be carried out both within the office and when allowing employees to work remotely. Basic cyber hygiene includes regularly changing passwords, and consistently performing security updates on all devices.
Implement a layered security approach – One of the most important things we implement when designing a security plan for our customers is our seven-layered security approach. These layers include data, application, endpoint, human, network, infrastructure, and external edge. Having a layered approach to cybersecurity ensures that if one protocol fails, the other defenses are still in operation. Cloud solutions, identity and access management, and multifactor authentication can also be added to a layered cybersecurity approach.
Increase employee cyber awareness through training and communication – Company culture should always include cybersecurity accountability. This can be done through cybersecurity awareness training and encouraging communication. With this, you can encourage every employee to do their part to stop threats and ensure they know exactly how to respond to an incident when and if it happens.
Why Cybersecurity Should be a Priority for the Fintech Industry and How Tekscape Can Help
Consider letting Tekscape be your managed service provider for your fintech company’s cybersecurity.
We have proven results for financial services. Businesses are utilizing digital transformation to elevate their brand into the future through managed IT services. Our engineers address key challenges that surround financial services like meeting compliance. As a leader in cloud technology solutions, Tekscape connects businesses to cloud-based services to increase security, revenue, and efficiency. We equip businesses with a strategy and foundation, helping provide the tools to gain actionable data through managed IT services, cybersecurity, digital transformation, and team collaboration. The financial services landscape is very competitive. The environment demands for safe, convenient, and intuitive digital experiences. Tekscape helps financial services meet these expectations so that clients are attaining their goals.