Best Cybersecurity Practices in Fintech
- by Justice Levine
Despite the Fintech industry seeing a massive increase in growth, they are also experiencing more than twice the number of attacks in the first quarter of 2022 than at any time in the last two years.
The growing rate of cybercrime has made security professionals tasked with protecting these environments question whether the level of cybersecurity protection being implemented is enough. In a market projected to reach $190B by 2026, it's no wonder cyber criminals are targeting the fintech industry so aggressively. But with a growth rate of more than 13% in that same time period, and fintech companies experiencing 2.5 times more attacks than in the previous two years, fintech organizations may be overlooking many of the security precautions that should be put in place to secure their customers' financial information. This article will discuss Fintech Cybersecurity challenges, as well as methods of preventing an attack in order to keep information secure.
The Importance of Cybersecurity in Fintech
Traditional banking is attempting to modernize in order to support customer demand for innovative services. One way this is done is by partnering with Fintech companies to provide financial products such as mobile payment processors, small loan approval, insurance, and digital crypto management. Fintech companies are typically small startups that grow quickly, making it easier to produce applications in more rapid release cycles than banks are capable of internally. When traditional banks make the decision to partner with Fintech organizations, they develop the ability to respond to rapidly evolving market demands while retaining existing customers.
For the last several years, providers in the financial service industry have been targeted the most by cyber criminals. As opposed to traditional banks, Fintech is not required to follow the same strict regulations and often does not fully secure its solutions or lacks security measures altogether. Fintech startups are at more risk than traditional banking methods and are more likely to face security costs without properly secured products.
Proactive cybersecurity solutions, such as penetration testing, help businesses minimize their digital risk. Email is a critical resource in the financial industry as it is used to authenticate, notify users about transactions, marketing, and other customer communications. A lack of email security protocols can negatively impact the loyalty of your customers, product credibility, and the services you provide. Having a cybersecurity strategy in place that provides the necessary features and policies is an essential tool for businesses in the Fintech industry.
Fintech Risks and Challenges
Fintech organizations all have to face certain threats, regardless of what specific vector they operate in. These risks and challenges include:
Securing Networks and Applications
Applications are a fundamental aspect of most Fintech businesses as they encourage organizations to reach more users and expand the range of services they offer. Applications can also be vulnerable to attack with cyber attackers targeting the application with the intention of gaining access to the entire network.
Identity theft and fraud
Fintech apps allow users to fill in sensitive data and easily transfer money, creating opportunities for attackers to gain access to accounts. Once they have access to those accounts, they will be able to steal money, or use the user’s identity for fraud. Simple password verification processes can easily be hacked, so maintaining the security of users’ digital IDs is a constant challenge.
Fintech is a target for malware due to the combination of personally identifiable information (PII) and financial access that it provides. Some common cyber attacks that frequently attack Fintech include:
- Denial of service attacks: an attack that involves attackers flooding the application with traffic, effectively preventing legitimate customers from using the app.
- Phishing attacks: an attack where cyber criminals pose as known or seemingly trusting individuals to extract information from users and use that information to compromise information and access the application.
- Ransomware: an attack where attackers infiltrate the network and encrypt it demanding payment in order to decrypt the network or files.
Tips for Keeping Your Fintech Organization Secure
Cybersecurity is a necessity, especially for the Fintech industry, and failing to implement best practices only makes your business a viable target for attackers. Basic protocols you should be mindful of include:
- Know your assets and manage change: decide which assets are the most valuable to your organization to promote growth without exposing assets.
- Practice cybersecurity hygiene: regularly change passwords and consistently perform security updates.
- Implement a defense-in-depth approach: supplementary protection provides businesses with a remote extension of their IT department and experience peace of mind, knowing that their users, their data, and their reputation are secure.
- Educate employees and increase communication: properly train staff, encourage effective communication, and ensure they know how to respond in the event of an attack.
Technology continues to evolve, as do the techniques and methods attackers use to infiltrate systems. Practicing basic cybersecurity protocols is a good start, but there is more you should be doing to protect your business, including:
Prioritize Identity and Access Management
Integrating an innovative identity and access management system that keeps your business secure and protects your company from internal threats and attackers. For example, using AI technology for online document verification helps you eliminate illegitimate documents and prevent unauthorized access and fraudulent activities.
Secure the Cloud
Most fintech applications run on the cloud and while there are several benefits, it runs the risk of exposing your data and security to attacks. Implementing a robust cloud security strategy provides the necessary coverage to protect your company and customers.
Test The App For Vulnerabilities
Penetration testing (pen test) is an authorized simulated attack performed on a computer system to evaluate its security and can be carried out at any time, including just before release, and will identify any vulnerabilities in development that could be exploited.
Implement Robust Encryption
Having SSL and HTTPS is not enough to secure your business. Encrypting all of your data as well as your email adds an extra layer of security to your data, products, and systems. Even if they are compromised, breaking through the encryption and stealing data is next to impossible.
ATM and Payments Software Provider Attacked With Ransomware
In 2020 Diebold Nixdorf, a major ATM provider, and payment technology to banks and retailers, suffered a ransomware attack that disrupted operations, only affecting their corporate network. The company’s security team was alerted by odd behavior on its corporate network and suspected a ransomware attack, before immediately beginning to disconnect systems on that network to contain the spread of malware.
Investigations found that the attackers had attempted to install ProLock ransomware in the firm’s networks. Fortunately, disconnecting the systems helped the firm to contain the attack. Diebold Nixdorf said that while they did not pay any ransom, their response affected services for over 100 of the company’s customers, and disrupted a system that automates field service technician requests.
The single most effective method of preventing a ransomware attack is ensuring that your organization has implemented a multi-tiered cloud email security solution that fortifies cloud email with critical additional real-time security defenses designed to fill the voids in built-in protection. The majority of ransomware is delivered via a malicious attachment in a phishing email, so effective email security solutions include malicious URL protection, multiple email authentication protocols to detect email spoofing and prevent sender fraud, and the ability to scan for malicious code in attachments.
Cybersecurity should be a concern for modern businesses, but especially for the Fintech industry. It is essential to implement best practices to protect against cyber risks as Fintech companies are responsible for the financial information of customers.
- Improve your email security posture to protect against attacks and breaches by following best practices.
- Stay up to speed by protecting sensitive data & maintaining client trust in the financial services industry.
- Keeping the integrity of your email safe requires securing the cloud with spam filtering and enterprise-grade anti-spam services.
- Understand the anatomy of account takeover and lateral phishing attacks to help your staff prevent an attack.
- Get the latest updates on how to stay safe online.
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