Whatever your profession, or interest level in finance, everyone should care about the state of cybersecurity of FinTechs.
Why? Well, while it may seem like an obscure or sweeping statement, in this era, an ever-increasing amount of our financial transactions take place in an online setting. This is usually with thanks to some financial technology.
In the last couple of years, the number of transactions that rely on FinTech has surged, making the state of FinTechs and their cybersecurity of greater importance to many more people.
If FinTechs are vulnerable to cybercrime then our money, our investments and all transactions are vulnerable.
Unfortunately, with the rising demand and usage of FinTech, so too comes a rise in cybercrime to exploit it.
Thankfully, there are some simple changes that FinTech firms can make to shore up cybersecurity and protect everyone’s finances.
The Role Of The Pandemic In FinTech Growth and Relevance
The reason for the rapid increase in dependency on FinTech is partly due to the pandemic.
Most people, in a business setting, were already well aware that the trend towards a digital landscape was happening. In fact, for almost everyone everywhere this trend is hard not to notice. The digital continues to permeate all avenues of life with greater capacity.
Yet few could have predicted such a swift and dramatic increase in online financial services across every sector and for personal use until the pandemic took root.
It was true that certain tendencies were taking place pre-pandemic, such as the closing of brick and mortar bank branches in favour of encouraging customers to use online banking, but in most cases of financial services, the transition was relatively slow, occasionally met with resistance by certain demographics.
Or it would certainly seem slow compared to what was to come during 2020 and 2021 when online became the default necessity of most operations, including finance.
What Is Happening In FinTech Growth?
We believe that Fintech ingenuity, during the pandemic, has significantly accelerated technological advancement in key crucial areas.
In the UK, the FinTech industry saw a record year for investment in 2021. In fact, it was a 217% increase from the previous year, which exceeded $11.6 billion.
Fintech’s investment growth is now predicted to reach £380 billion by 2030 in the UK alone. Investors saw just how vital financial technology was during the pandemic.
The innovations of FinTech kept businesses open and trading during the pandemic and this spanned a wealth of different services. After all, FinTech covers a large chunk of technology from bitcoin to online payment portals and online investing and insurance to traditional online banking. It enables all these services to take place and is constantly innovating to make financial exchanges and investments easier.
The pandemic also accelerated the adoption of those FinTech technologies and the demand for them among businesses and end users. Even in sectors and demographics where adoption of new tech is slow, such as large companies with layers of bureaucracy or in older demographics, we’ve seen a faster uptake of the tech provided by FinTechs.
This is the reason that everyone should care about FinTech’s pandemic recovery and the big impact both these factors (FinTech innovation and the pandemic legacy) have on the way we work moving forward.
Despite some incredible innovations in the last two years that helped keep the UK’s economy open, cybercrime has become an ever-growing and more sinister threat for all kinds of FinTech firms.
How Significant Is The Threat Of Cybercrime to FinTechs?
The cost of cybercrime is far more for FinTechs. In fact, data breaches in FinTech on average cost $2 million more than the average cost across ALL other sectors.
It is estimated that cybercrime attacks rose by up to 600% during the pandemic. It is easy to see that FinTechs must do more to guard against threats. The bitcoin FinTechs are under particular attack by malicious forms, but all genres of FinTech are a target.
How Can FinTechs Leverage Better Cybersecurity?
1) Addressing Cybersecurity At The Hardware Level
An important starting point in cybersecurity for FinTechs is the hardware they choose. While all manufacturers attempt to make their devices secure, not all are created equal.
The top manufacturers go further when it comes to their business-grade level devices, hence you’ll find business laptops from Apple, Microsoft, Samsung and Lenovo with added layers of in-built security.
Macs with M1 chips have particularly strong in-built security. Passwords are more highly protected, and files and data are automatically encrypted. This is aided by the Secure Enclave in the new integrated chip architecture. macOS is regularly updated to maintain cybersecurity. In-built software like XD, ASLR and SIP come as standard on Macs to make them harder to breach.
However, it’s not enough to have good hardware. It must also be maintained. As hardware ages, it becomes more obsolete and more vulnerable. Old devices are a liability. That is why access to automatic upgrades is more important for sectors like FinTech.
2) Addressing Cybersecurity At The Software Level
While the top manufacturers work hard to make their business-grade devices cyber secure, some industries with extra sensitive information need more.
Apple has produced computer equipment with an incredible level of in-built security, and this is especially true of their devices with M1 chips, but even these come with caveats.
Knowing that FinTech is more targeted by cybercriminals, we know they need to go further than the basics with cybersecurity.
FinTechs need to take their Data Loss Protection seriously.
There are many different types of malware out on the web, including:
- Data breach
- Cloud computing vulnerabilities
Of course, while all these are growing in sophistication, there is also the ever-present trouble of human error. Data breaches increased during the pandemic, owing to more employees working from home on their own devices on inadequately secure home networks.
Cybersecurity software, such as Sophos, Symantec DLP and Jamf Protect can build a digital fortress around FinTechs data and greatly enhance a device’s in-built security.
The combination of specific Data Loss Prevention software and secure hardware is the biggest factor in preventing data breaches in FinTech.
DLP can detect sensitive data, monitor it through your company systems and alert you, and/or encrypt the data to protect it from all threats. DLP can be applied on a Network level, Device level and Cloud level for a comprehensive security approach.
3) Tailored Cybersecurity At A Support Level
Secure hardware and software will be the answer for most FinTechs, however, some will have to go even further with their security strategy.
Each FinTech company is unique and potentially utilises diverse and different tech, especially if they are creating an innovative new experience for finance in the market. Sometimes the most creative companies will need more to protect their code and new infrastructure from cybercriminals who might exploit holes in a new system.
Secure hardware and software is the right start, yet the more unique the platform and service, the more likely it is that it will need tailored cybersecurity systems.
It is advisable for FinTechs to seek a higher level of support and service. This is useful for helping the business to manage and maintain their security at all times, but also to monitor and improve current systems. It could go as far as designing specialist cybersecurity solutions.
To get this level of ongoing support and service, DaaS (Device as a Service) packages can be a good way to go. They can deliver that extra support that FinTechs require and some of the best DaaS packages grant extensive strategic cybersecurity support from trained engineers.
Regardless of how a FinTech gains access to this support, it will be useful for many of them to look into extra bespoke cybersecurity systems.
Carissa Parnell has been with HardSoft for over 10 years, she is a content writer and helps us with blogging. She is highly experienced in copywriting for SEO strategies, web copy, email marketing and article writing.
Carissa’s interests include Gaming, Sci-fi, fantasy and fashion.
LinkedIn: Carissa Parnell