Fintech companies are at the forefront of digital transformation in the finance industry, changing the way of managing risks and performing transactions. While the digital transformation is taking place across all segments of the industry, maintaining cyber security must be our highest priority to safeguard our resources and secure our transaction processes.
The integration between digital technology and financial services have grown tremendously over the last couple of years and has given a pretty much rise to the Fintech industry. Today’s Fintech companies are promising the wide range of services that can enable millions of previously unbanked people to gain access to the modern financial services ecosystem. However, there are cybersecurity challenges that might create a problem for this ecosystem.
According to the recent research, it was found that 45% of the financial industry has suffered fallout from the cyber-crime and by 2019 the cost related to it will reach up to $2 trillion. As we saw last year, more than 3 million credit card records were leaked online and two of the major bank heist stating that cyber attacks are becoming a major issue for the global financial system.
We all know that the finance companies conduct communication of major business functions such as fund transfers and instant loans through digital finacial interfaces. These digital interfaces open many opportunities for the cybercriminals to take the advantage and exploit vulnerabilities within these digital payments. To help guard against this, Fintech companies should protect these interfaces and do a proper testing such as penetration testing during product development processes, including by people who can take a clean-slate of the aggregated system.
In the last couple of years, many Fintech companies have implemented machine learning for developing their solutions and products. Machine learning showed us an enormous promise for building a big Fintech-startup base. While the reciprocation between cybersecurity and machine learning is still complex. On the other hand, in some situations building a solution using machine learning can be hard for some programmers to understand the system’s behaviors, which can lead to security weaknesses in the solution. In addition, the hackers will use more powerful attack techniques to attack these digital financial interfaces, these techniques will also be based on machine learning.And to help guard against this, when developing the machine learning-based solution, programmers should be well aware of how machine learning works and they should also pay particular attention to develop a robust cybersecurity defense mechanism using vital encryption techniques which can be easily iterated into their solution late on.
Having a Chief for Information Security is also crucial for companies, a CISO who can help establish a security culture within the company.
There are very few Fintech companies that have adequately invested in developing their cyber security frameworks to ensure safer and more secure digital payments experience for their users. And many companies do not even make a choice from a range of possibilities of monitoring the network traffic or take a periodic back-up of their systems, which are all measures that can help preventing a data breach or a high volume cyber attack such as Distributed denial of service attack on their systems.
However, there are cyber security challenges that might create susceptibility in this ecosystem. According to the survey conducted by PwC, 88% of incumbents are worried about revenue loss to fintech startups, 77% plan to increase internal innovation, 30% are investing in the artificial intelligence and 55% expect to adopt blockchain technology in some form or another by 2020.
FinTech is the future of finance and cybersecurity is what will keep the industry safe. Work cybersecurity into your planning now and you will be able to sleep better at night as your company grows.