As the financial technology (fintech) industry continues to grow, security must remain a top priority. With new digital payment methods and online banking becoming popular, fintech companies are targets of cybercriminals looking to access sensitive customer data. To mitigate these risks and protect your fintech application, it’s important to have an effective security strategy in place. In this blog post, we’ll discuss the different types of fintech security measures you should consider implementing for your business. By taking the necessary steps now, you can save yourself from potential headaches down the road.
Why Does Fintech Security Matter?
Banking and cybercrime have been linked together since the dawn of digital financial operations. Data breaches occur for a variety of reasons, from malicious activity to human error or technical complications but no matter what caused it, once information has leaked out it can quickly tarnish reputations and cause immense harm in terms of lost property value and intellectual capital. To help demonstrate exactly how important cybersecurity is in today’s world, we’ve compiled some alarming statistics on just how pervasive these threats are: get ready to protect your software with vigilance!
+ The average cost of a data breach in the United States in 2022 was $9.44 million, up from $9.05 million the previous year. In 2022, the global average cost per data breach was $4.35 million. (Statista)
+ Every day, 560,000 new pieces of malware are detected. (DataProt)
+ According to the 2022 Phishing report, more than 43% of banking staff at large organizations are on the verge of failing a phishing test. (KnowBe4)
+ Europe, Asia, and North America are the top three regions most affected by breaches in the third quarter of 2022. Europe accounted for half of all Q3 breaches. (Surfshark)
What Are The Fintech Security Risks?
Fintech security risks can come in many forms, from malicious attackers to accidental data leaks. Some of the most common risks that fintech companies should be aware of include:
Identity Theft
With the rise of fintech, financial services have become more accessible and convenient than ever before. However, this has also created new opportunities for cybercriminals to engage in identity theft. Identity theft in fintech can occur when hackers gain access to personal information, such as social security numbers and bank account details, and use this information for fraudulent activities.
The consequences of identity theft can be severe, from financial losses to reputational damage. As such, fintech companies must prioritize the security of their platforms and implement measures to protect their users from these risks. It is essential for individuals to also be vigilant and take proactive steps towards safeguarding their personal information in the digital age.
Phishing Attack
Recent phishing techniques, designed by hackers to look like genuine emails from financial institutions or company executives, are a serious hazard for fintech apps and their users. If maliciously exploited through resetting passwords or sharing confidential information over the phone, these attacks can have devastating consequences allowing attackers access to precious identities and data that could eventually lead to ransomware intrusion or major breaches of security.
Data Breaches
Data breaches can happen in any industry, but they are particularly dangerous in fintech due to the sensitive nature of financial information. Hackers can use stolen data to steal money or gain access to other personal accounts, with devastating results for individuals and organizations alike. Fintech companies must ensure that their systems are secure by implementing measures such as encryption, multi-factor authentication and rigorous security protocols. Additionally, they should consider data breach insurance to protect themselves financially in the event of an attack.
DDoS Attacks
Distributed Denial of Service (DDoS) attacks are a form of cyber-attack used to overwhelm the network traffic or server of an organization. With the absence of rate-limiting or resource restrictions, fintech applications are facing a heightened risk of being subjected to malicious DDoS attacks.
These are just some of the potential risks associated with fintech security. As the industry continues to evolve and expand, it is important for companies to stay informed on the latest threats and take steps to protect their systems from attack. By implementing effective security measures and staying vigilant, fintech companies can help mitigate these risks. So, let’s dive into this pivotal sector!
Best Practices To Protect Your Fintech Application
There are several best practices that fintech companies can implement to protect their applications from malicious actors, some of which include:
1/ Implementing strong authentication protocols, such as multi-factor authentication
In order to protect against cyberattacks, fintech apps must carefully implement a multi-layer security infrastructure. This approach should start with identification of users through their name and username; continue with authentication via passwords and two-factor verification processes; then culminate in authorization which outlines what access they are allowed within the system. By adhering to these stringent measures, organizations can ensure that malicious actors cannot gain unauthorized entry into user accounts or sensitive data stores.
2/ Limiting access to critical data
Fintech organizations should ensure that only authorized personnel can access mission-critical data and information. Leveraging role-based access control (RBAC) or least privilege systems for granting user permissions can help in restricting the risk of unauthorized users accessing sensitive information.
3/ Enhancing APIs and cloud servers’ security
Back-end security is a crucial element for safeguarding data, and developers must ensure they are prepared to respond quickly should any vulnerabilities be discovered. Automating certain tasks can prove helpful but one needs to exercise caution here – limiting the number of third parties involved in such processes will provide extra assurance that all integral pieces fit together cohesively. If advanced capabilities are required, it’s often best practice to select components from reliable providers and vendors.
4/ Safety testing
To ensure the utmost security of your fintech application, thorough testing is an absolute activity across the entire development life cycle. Time constraints should never take precedence over ensuring that every stage meets stringent standards for verification, authorization, performance and data safety; so, it’s important to double-check all potential flaws. Real time monitoring also serves as a safeguard against unexpected issues with the app or any essential frameworks or techniques employed in production.
5/ Establishing response plans
In the event of a security breach or attack, fintech companies must have a plan in place to respond quickly and efficiently. This will involve having a dedicated team in place who can respond to the incident, establish containment procedures and mitigate potential damage.
6/ Implementing data security policies
Organizations should have clear policies in place regarding best practices for data security. These should include protocols on how to handle sensitive information, monitor user activity within the system and respond to any potential threats.
By implementing these measures, fintech companies can ensure that their systems are secure, and they are better prepared to combat the ever-evolving cyber security threats.
Final Thoughts
As the fintech industry continues to grow, cyber security threats are also on the rise. It is essential for organizations in this sector to take proactive measures and implement best practices that protect their applications from malicious actors. By following the guidelines outlined above, fintech companies can ensure they have a robust security infrastructure in place that will allow them to detect and respond quickly to any potential threats. Taking these steps should help provide peace of mind as you continue your journey into this dynamic field!
