Why is Cybersecurity crucial to the Fintech sector?

Over the past ten years, there have been many technological improvements, from more straightforward banking options with mobile banking to comparatively easy transactions, investing, and borrowing solutions; every day, something new is available for everyone to explore digitally. FinTech commonly referred to as Financial Technology simplifies the management of many tasks that are part of daily life. Even though the sector has been around for a very long time, some important problems, like cybersecurity, still need to be overcome because FinTech is still perceived by many as being a relatively new concept. However, if these issues are not resolved, they can cause significant mishaps in the future.

Data breaches result from numerous thefts and hacks, and the main cause is a lack of effective security measures. Banks are compelled by law to accelerate in-house protection, while FinTech companies are comparatively exempt from these requirements. 

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Top Cybersecurity threats in the fintech sector

The vast majority of financial institutions heavily rely on applications to help users complete transactions. Application developers must be aware of the dangers and difficulties to put effective security measures in place to mitigate them. 

Some of the examples of security flaws in Fintech are listed below:

Security Issues with Cloud Computing

Data no longer needs to be kept on home computers or in nearby data centers. Cloud Computing is now the foundation for the internet supply of financial services. It’s crucial to be aware of a few security issues as cloud technology becomes more prevalent. Cloud Computing offers various advantages like speed, accessibility, and scalability. However, because of the volume of data passing through the cloud, hackers can more easily launch cyberattacks. Financial institutions must ensure that the cloud services they choose are reliable. A minor breach can quickly become an irrecoverable loss. One of the main reasons for security vulnerabilities in cloud computing is the improper configuration of cloud resources.

Data Security 

One of the biggest concerns for the fintech sector is identity theft and data breaches. To protect the payment system, fintech companies utilize one-time passwords and other authentication techniques. Hackers are still able to access these systems, stealing financial and personal data. Financial firms have always been in danger of data leaks as cyberattacks become more sophisticated every day and establishing total security in the digital realm is quite a challenge. 

Malware Attacks 

The most frequent kind of cyber risk affecting the financial services sector is malware attacks. Users are vulnerable to malware attacks when using unreliable third-party software, emails, or websites. Malware attacks are more likely to spread quickly and result in irreparable damage. 

Third-party Services 

Another security risk that affects banks and other financial institutions is third-party access. Financial companies frequently rely on third-party software. But hackers frequently use these third-party programs as a gateway. They provide hackers with a chance to impersonate authorized users and obtain access to systems without authorization, compromising data security. Financial institutions must pick a reliable provider when working with third-party software. 

How to avoid security flaws in Fintech – best practices

 Here are some crucial Fintech solutions to have in mind when creating secure applications.

Data Encryption 

When using encryption, information is encoded and rendered unintelligible until specific keys are used. You can encrypt your data using one of the following algorithms:

• RSA 
• TwoFish
• 3DES

Secure authentication technologies 

Implement the following measures to safeguard your fintech application against targeted internal and external security threats:

• OTP System 
• Password change 
• Monitoring 
• Time of login sessions 
• Adaptive authentication 

Role-based access control 

In accordance with your affiliation with a certain organization, role-based access control modifies your access level. Even if you hold positions within the company as an IT specialist, customer, manager, etc., you won’t be allowed access to areas outside of your scope. This feature significantly reduces cyberthreats both internally and externally. 

It’s crucial to select the best software development business with the appropriate amount of competence when creating your fintech application to match all of your needs.

DevSecOps 

In conjunction with current Cybersecurity developments, Software Development Life Cycle strengthens a fintech application’s security. DevSecOps greatly facilitates a secure financial application’s development. The key component of this idea is cybersecurity, coupled with other crucial elements like the testing process. 

Importance Of Cybersecurity In Fintech

Fintech startups and firms provide more flexible goods and services as compared to banks. In addition, they provide a faster time to market, which is crucial from a business standpoint. Due to their quick release cycles, fintech companies frequently simplify their products or exclude critical functionalities. Due to this, fintech companies frequently only partially or completely protect their solutions, especially when they cannot immediately see the benefits to their business. Fintech firms may also reduce their non-functional data security standards due to a lack of cybersecurity awareness and the misconception that completely safe products aren’t flexible enough from a business standpoint. 

This frequently results in the creation of goods that are functional but inadequately secured, which are likely to produce significant security expenses when these products are scaled and must be properly secured or corrected. As a result, doing business with fintech startups can be riskier than putting your faith in large banks.

Overall, a fintech company may be more likely to experience a security breach than a rigorously regulated bank, but the repercussions may be similar because both processes the same kind of data.

Summing it up

To secure any financial solution, you must have a strong security engineer. A DevSecOps team, made up of engineers with strong hard and soft skills, can even take security one step further. A DevSecOps team can easily create software that follows the secure-by-design methodology. 

With the aid of a cyber security engineer, you can protect your business from these cutting-edge hazards. You may recruit a qualified Cyber Security Engineer through PeopleActive in less than 48 hours.