The financial services industry handles vast volumes of sensitive financial and customer data. Cybercriminals know it offers a massive payday, so financial companies are under enormous pressure to stay ahead of cybercriminals. At the same time, they have to keep innovating at break-neck speed to integrate fintech services into old-school banking solutions.
The main industry risks are malware attacks, hacking, and data breaches. FinTech companies are in a race to attract more customers without exposing themselves to the security vulnerabilities that are inherent in the financial services industry. Is it possible to balance the risk of cyber threats against the benefits of digital expansion?
Fortunately, some of the risks can be mitigated by equipping employees to be the first line of cybersecurity defense with the best cybersecurity information. Other risks are more complex and require a layered approach to cybersecurity.
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Employees as a First-Line Defense
Employees and the ways they go about their daily tasks can pose a massive risk to a company’s cyber security posture but also offers an opportunity to improve the odds. It’s imperative to bolster their ability to protect themselves from cyber threats to prevent small mistakes from escalating into company-killing cyber incidents:
● Implement rigid remote access management: People have become used to ‘always on’ lifestyles, and they don’t hesitate to use their smartphones, laptops, or home computers to get their work done. Like all businesses, the first step to a more secure network is to forbid access from unsecured Wi-Fi points. The banking and FinTech industry, however, has several good reasons to roll out a remote access VPN solution.
● Use Multifactor or biometric authentication: Multifactor Authentication (MFA) provides an added layer of security, even if it is not foolproof against hackers using social engineering.
● Protect against Phishing: Criminals target bank employees with innocent-looking emails that are tailored to get clicks on a link to download malware or get them to divulge login details and other personal information. Once an attacker gets access to an employee’s email account, they can view, copy, and manipulate internal documents and customer financial information, send emails on behalf of the company, or even use the employees’ social media accounts.
● Prevent Malware and Ransomware attacks: A ransomware attack can lock you out of your systems, wipe out your data, and kill your brand. The entry point is always via an unsuspecting employee. The answer is to set up protected network access points, implement antivirus and endpoint security tools, and block and delay the spread of malware through a network.
Broader Cyber Threats Inherent in the FinTech Sector
The Fintech industry is highly cyber-dependent, with a larger digital footprint than other industries. Accelerating digitization strategies means FinTech companies face some unique, urgent challenges.
● Outdated digital architecture: Most banks still use legacy systems written in vanishing legacy programs like COBOL, which can be vulnerable to cyberattacks. Fintech companies must find ways to integrate their much newer systems with existing, rigid banking systems without compromising the integrity of either system.
● Insecure Application Security: Banks use Fintech applications to carry out real-time financial transactions, which, in turn, rely on APIs. Inherent security flaws and API misconfigurations are two leading causes of security breaches.
● Cryptocurrency and money laundering: Due to the popular misconception that cryptocurrency is ‘untraceable,’ it has in the past attracted its fair share of dubious clients and players. Fintech companies face pressure to integrate cryptocurrency transactions on their platforms, despite the glaring lack of formal global standards and regulations. There is a real danger that moving too fast can cause the industry to become entangled in money laundering or terrorist funding.
● Cloud-based solutions are cyber risks: Cloud technology is one of the cornerstones of the Fintech industry’s payment gateways, digital wallet solutions, and sensitive customer data. But even tech behemoths can be penetrated, and inadequate security measures can result in the theft or corruption of your financial information and customer data.
● Unsecured Internet of Things (IoT) devices: There are currently almost 17 billion active IoT devices in use, and the majority of these have flaws that can expose them to hacking and exploitation. Tools like automated HVAC or security systems can be hacked and used as a starting point to penetrate FinTech company networks.
● Supply chain attacks: Supply chain attacks present a nightmarish scenario where you become an unwitting victim of cyber attacks perpetrated against the security, hardware, and software companies that are supposed to keep your company safe. The recent GIGAbyte and MOVEit attacks are just two examples of situations that have not yet fully played out.
● Third-party consultants, contractors, and business partner risks: There’s always pressure to reduce the costs of maintaining compliance and security. Beware the possibility that one of your vendors may be a weak link in a chain reaction with far-reaching implications for your company.
FinTech at the Forefront of Cybersecurity
The Fintech industry is at the cutting edge of digitization, and even smaller FinTech services companies attract much attention from shady actors. A piecemeal approach to cyber safety can put everything at risk, so all industry players should elevate cybersecurity to a non-negotiable starting point and ensure that it gets built into every company process, goal, strategy, or aim.
