Cybersecurity in Fintech: The Challenges and Solutions to Keep Financial Data Secure
Out of all the industries, Fintech is one of the most common targets of cyberattacks. Because technology is constantly evolving, new threats are emerging every day. The safety of Fintech companies and their customers depend on a variety of cybersecurity strategies and safety measures. However, since hackers are becoming more and more equipped with new tools that allow them to hack into financial systems, it becomes crucial to understand how to fight them. That is why we’ll discuss the challenges and solutions to keep financial data secure. Here is everything you need to know!
Five most common challenges of Fintech industries
When it comes to cybersecurity, Fintech companies struggle to maintain their data safe. It is important to understand the significance of data quality and security management. The most common challenges of cybersecurity experts are:
- The sensitive nature of financial data
- The complexity of financial systems
- Third-party vendors and APIs
- Inevitable human errors
- The evolving nature of cyber threats
Let’s take a look at each of these challenges to understand why they cause so many problems. Also, let’s look at some solutions that should help keep your financial data more secure.
The sensitive nature of financial data
When we talk about the challenges and solutions to keep financial data secure, we must first look at the root cause of the problem. Why is the Fintech industry one of the leading targets of hacker attacks? The answer lies in the sensitive nature of financial data.
Bank account numbers, credit card information, social security numbers, and other types of financial data have a lot of value. Protecting against specific hacker attacks aimed at stealing this data becomes challenging. Failure to keep it safe will lead to substantial financial losses, identity theft, and even irreparable damage to the reputation of the target.
Implementing strict security measures is the only real solution to protecting sensitive financial data. This includes closely monitored access control, biometric and two-factor authentication, and other security measures. The more, the better.
Additional layers of security will increase the chance of protecting sensitive data. This is not just because a hacker will need more time to break in but also because all of these systems require different types of security breaches. By increasing the complexity of the cybersecurity systems, you are reducing the number of hackers with enough knowledge to break through all of them. Also, it will give you more time to fight off the attack once the system identifies a threat.
The complexity of financial systems
Fintech companies often use different systems, such as various APIs, websites, mobile apps, cloud services, etc. The more systems you have, the more you have to think about where the attack will come from. Also, each of these systems is different, requiring a different strategy to protect it. This is a prevalent challenge because the complexity increases the time necessary to identify the attack.
The best strategy to use in this situation is to conduct regular vulnerability assessments. For example, let’s talk about protecting a web portal. According to WP Full Care, it is necessary to know the weak points and how to protect them. This approach will allow you to protect your website even before the attack happens proactively.
Another option is to reduce the number of systems you use. Look for unified solutions using a single platform for the entire company. That way, you can utilize all resources only to monitor that platform. You will be able to afford a higher security standard, and it will be easier to identify vulnerabilities.
Third-party vendors and APIs
To continue where we left off, Fintech companies also often rely on the use of third-party vendors and APIs to run their businesses. For example, if your company does not own data storage, you will have to rent it from another company. Also, suppose you want to improve your business by providing various services, such as payment processing or customer verification. In that case, you will discover that creating a contract with a third-party vendor is cheaper than creating your own eCommerce system from scratch.
Another reason why companies resort to this is that it saves them time and money. For example, instead of purchasing a payments processing system, hiring people, and training them to work in it, you can outsource this task using a third-party service. The complexity of this solution is that each of these vendors only adds more security risks that you cannot control.
If you decide on this approach, the best solution is to thoroughly review security policies and procedures before signing a contract with them. This is a necessary step because you must know the potential threats.
Additionally, implement strict access controls between your company and the third-party vendor. Create restrictions, and ensure that no one can access financial data without proper authorization. All communication must be defined within the signed contract. If the third-party company does not satisfy your standards of cybersecurity measures, you should not do business with them.
Dealing with human errors
It is in the nature of people to make mistakes. That is not something we can change because people learn from mistakes. That is what makes them better. However, when it comes to financial security, you often don’t have the luxury of learning from your mistakes without severe consequences.
For example, an employee could accidentally share their credentials or forget to update the software on their laptop. Also, they could click on a suspicious email and become a victim of a phishing attack. It is even possible that an employee intentionally commits a crime and misuses financial data. That creates so many vulnerabilities that hackers can and will exploit.
When it comes to protecting your business, it is necessary to implement strict safety procedures and policies and severe countermeasures for anyone who does not comply with the safety guidelines.
You should enforce the use of complex passwords and also make sure they are regularly changed. Furthermore, create permission rules that restrict employees from accessing unauthorized data. Finally, it is necessary to invest in education promoting best cybersecurity practices. Do a cybersecurity awareness test every few months, and ensure all your employees pass. This is a necessary approach that will substantially reduce the probability of human errors that could jeopardize the safety of financial data.
Ever-evolving cybersecurity threats
We have mentioned at the beginning how technology moves forward, which leads to new types of cyber attacks. Cybercriminals constantly face increased safety measures, forcing them to develop new strategies and techniques. They evolve together with cybersecurity systems. That is why Fintech companies must also stay up-to-date with the latest threats and find a way to battle them.
This is where you should use advanced technologies like artificial intelligence and machine learning. These are excellent strategies for detecting potential threats and coming up with a quick response and a solution. Also, you should communicate with authorities and help them battle cybercriminals in the Fintech industry. It is necessary to have a strong partnership with those who can help you and protect your business and your customers in the long run.
The Challenges and Solutions to Keep Financial Data Secure – explained!
Understanding these challenges and solutions to keep financial data secure is the first step toward a better strategy for protecting financial data. Researching potential attacks and threats is crucial and identifying the most efficient countermeasures. Investing in cybersecurity is necessary because all companies’ future depends on it. We are heavily transitioning to online platforms, and cybercriminals will only become more present and dangerous. With that in mind, it is crucial to have a proactive approach to preventing hacker attacks.