The importance of Cybersecurity in Fintech
Any business hosted on the internet and operating in the digital realm is prone to cyber-attacks. It makes the need for comprehensive cybersecurity an imperative for any digital-first business. Why is cybersecurity especially important for fintech companies? Fintech companies deal with financial transactions, personal account information, an individual’s investment portfolios, and more. In essence, fintech companies manage the lifetime savings of their customers, and any misstep in handling data or being prone to cyber attacks could prove catastrophic for their customers. Crypto investment platforms have been repeatedly hacked, leading to millions of dollars lost in crypto assets. Most recently, North-Korean hackers stole close to US$ 30 million worth of digital assets from the web3 game Axie Infinity. These attacks make it imperative for financial institutions to implement a robust cybersecurity infrastructure.
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Before we understand cybersecurity in more detail, let us first understand what constitutes a cyber attack. It is a digital attack targeting an enterprise’s cyber infrastructure, such as servers, data centers, software, and more, to disrupt, disable, destroy, or maliciously control a computing environment/infrastructure leading to the destruction of data integrity, financial loss, identity theft, intellectual property theft, and more.
What are the different types of Cyber-attacks in fintech?
Malware: A portmanteau of the words “malicious software,” malware is one of the commonest forms of cyber attack. It is used to disrupt or damage a user’s system. Viruses, spyware, trojans, ransomware, worms, botnets, and adware are different forms of malware used by hackers. The repercussions of malware in your system can range from critical infrastructure damage, credential leaks, and identity theft.
Phishing: It is a form of theft wherein hackers pose as members of genuine organizations and redirect users to malicious websites to collect their personal information and later hack into their accounts to steal data, money, and other assets, if any.
Man-in-the-middle attack: As the name states, a man-in-the-middle attack is where a hacker intercepts transactions between two parties. Once the hacker places himself between two parties, they will seem like genuine stakeholders and gain unauthorized access to personal information. A common type of this attack is when a cybercriminal intercepts the data transfer between two devices happening through unprotected Wi-Fi in a public place.
Also Read: What Is FinTech And Why Is It Important?
The latest forms of cybersecurity in the Fintech space
Romance Scams – Where cybercriminals use dating sites, chat rooms, and apps to prey on vulnerable people seeking a new partner and dupe them into giving away personal data.
Dridex Malware – A type of financial malware that affects public, government, and business infrastructure worldwide. Dridex infects the computer systems and the IT networks through existing malware or phishing emails and gains access to sensitive information, credentials, and emails.
These forms of cyber-threats make it important for fintech companies to ramp up their cybersecurity measures and work towards creating a robust information, data, and application security infrastructure.
What are fintech companies doing to ramp up cybersecurity?
Data Encryption: Since fintech companies need to collect personal information, including bank account and investment details, they implement comprehensive data encryption protocols like RSA, 2Fish, and 3DES. Further, in recent times, fintech companies have leveraged distributed ledger technology, commonly understood as blockchain, to create tokens that refer to a particular array of information, and these tokens are further encrypted to protect them from any threat.
Role-based Access Control: This isn’t exactly new. RBAC enables role-based access to information depending on the user’s relationship with the organization and said information – admin, supervisor, manager, IT specialist, customer, etc. This is a form of network security that eliminates unauthorized access.
Secure Application Logic: Have you been requested to change the password on your banking application every fortnight? Or have you been logged out automatically after 2 minutes of inactivity? These are the logic and guidelines to ensure your data remains protected by these applications. By implementing secure application logic, the application protects you from lurking danger. However, it might not be able to protect you from a targeted attack.
DevSecOps – Gone are the days when building and operating alone were sufficient. In today’s context, it is important to build, protect, operate, and more. DevSecOps is a framework that must be integrated into the software development lifecycle to continually build defense mechanisms. It is quickly becoming one of the fastest growing roles globally.
These are a few mitigation methods that fintech companies implement to protect their customers’ data from any cyber threat. Thanks to the increasing importance of cybersecurity, cybersecurity roles are in high demand, and that trend will grow further. If you are considering a career in cybersecurity, now would be the right time. Please check out Xpheno to hire the right person for the right job.