Key Cybersecurity Challenges Facing Fintech Companies

James Robertson, Banking CIO Outlook | Monday, July 12, 2021

While companies in this business may move swiftly and innovate, they become viable targets for cyber intruders as soon as they begin to grow.

Fremont, CA: The COVID-19 epidemic has created numerous chances for FinTech firms. Meanwhile, to operate the digitalization tsunami that everybody wants to take advantage of, customer penetration now reached new highs.

While companies in this business may move swiftly and innovate, they become viable targets for cyber thieves as soon as they begin to grow.After all, what's more, appealing than a single bundle containing both financial and personal data? It's precisely what FinTech firms possess, and it is what renders them so vulnerable to cyber-attacks.

Here are some of the cybersecurity challenges fintech firms are facing at present

  • Cloud Computing Security Issues

Cloud-based technologies are often used by an increasing number of financial companies, such as digital wallets, payment gateways, internet banking, and so on. Cloud computing has numerous advantages, including speed, accessibility, and scalability, to mention some.

On the other hand, the cloud also has a lot of information traveling through, making it an ideal smokescreen for hackers.It is critical to find a reputable cloud provider with a proactive and up-to-date security strategy.

  • Malware Attacks

Even though younger fintechs are shifting away from SWIFT and toward blockchain-based payment solutions, cyber intruders remain a significant threat. Unlike some other kinds of attacks, malware can enter through a variety of channels, including emails, pop-ups, phishing emails, third-party apps, and many more.Such cyberattacks are highly risky because they have a high data transfer rate and can bring entire networks down.

Automatic real-time antivirus software and frequent VAPT can help protect FinTech from malware assaults.

  • Identity Theft

To enhance each transaction's confidentiality and authenticate the identity of a person that starts it, many financial firms utilize biometrics, passwords, or one-time payments. Nevertheless, these approaches have a crucial flaw: they are easily replicable, making them an easy entrance point for hackers looking to steal significant sums of money.

  • Meeting Compliance Requirements

Companies may very well be required to comply with various policy and security regulations, such as GDPR, PSD2, PCI DSS, and many more, regardless of the type of finance company that manages (Specialized Bank, Electronic Money Institution, Payment Institution, and so on).

Failure to comply within the regulations can result in expensive fines, but more critically, severe security problems.

  • Convenience or Security?

Customers want quick access to banking facilities. Fintechs are well aware that they must frequently pick between ease and safety.

However, as the number of regulatory agencies and compliance requirements in FinTech grows, the business will be forced to strike the right balance between privacy and safety before introducing new products.

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