With the onset of the ongoing COVID 19 pandemic, cybercriminals started looking for opportunities to threaten the already suffering businesses through malware, ransomware, and social engineering attacks. Amidst this public health crisis, a new remote working culture evolved as remotely connected workplaces had to adapt rapidly to a greater digital threat emerging online. And one of the leading industry verticals - fintech, which was already disrupting the market with its unique and innovative developments, had to adapt quickly to this change as well.
Given the level of sensitive data, fintech businesses have to handle, they rely on cybersecurity more than anything. In fact, during the Sixth Annual Bank Survey, almost 70% of the fintech companies highlighted data security as their topmost concern. Accordingly, a thorough security approach becomes a must for these businesses in order to fight the ongoing cybersecurity woes. So, here we have come up with the top security trends which will drive the fintech business in the times to come.
Rising Risks in the Fintech Sector
A massive shift to the work-from-home (WFH) model of the economy has left numerous security networks vulnerable to cyber-attacks. Financial data has been left exposed on a large scale because of hastily implemented cloud data processes. Furthermore, security needs have nearly failed to keep pace with recent tech innovations. Fintech users are at a higher risk of cyberattacks more than ever because of an increasing reliance on mobile devices for everything ranging from managing bank accounts to checking credit scores and whatnot.
Let’s discuss some of the major security risks fintech business below:
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- With a little change in their security strategy, numerous fintech ventures are funded each year.
- Data is further exposed by new users who remain unfamiliar with the ongoing cybersecurity concerns.
- Fraud and identity theft are constantly on the rise, with COVID-related scams and online shopping frauds being some of the most popular among the threat actors.
- The ongoing pandemic has only made the cybersecurity situation worse. As companies look towards transitioning to the remote working culture, proper efforts have not been made towards incorporating security protocols and employee training.
As far as the fintech vertical is concerned, insider threat can also be considered a primary risk factor affecting data classification and requires strict corporate strategy as well as improved employee training. The increased risk in the ongoing pandemic economy calls for innovative solutions in order to fight the evil motives of threat actors. Fortunately, a number of emerging trends in the fintech sector possess the potential to turn the tides and keep the data of businesses and customers safe.
Top 6 Fintech Security Trends in 2021
Despite being at the centre of attention in the cybersecurity world, the fintech industry has fought back strongly. This is largely due to the trends that shape the cybersecurity of the fintech sector. Here are some of the emerging security trends which will continue to shape the fintech industry in 2021:
1. Adoption of AI for Fraud Detection
Fintech leaders such as MasterCard and Visa are progressing towards advanced artificial intelligence and machine learning processes for predicting and preventing financial fraud. The fraud detection AL systems analyze business and customer data to rank client risk and flag vulnerabilities based on the results of the analysis. Since AI can analyze massive amounts of data faster and flag unauthorized usage, it can play a major role in helping secure the fintech domain as more and more groundbreaking technologies enter and disrupt the sector.
2. Introduction of Secure Access Service Edge (SASE) Solutions
SASE or Secure Access Service Edge network architecture, similar to multi-cloud storage technology, brings multiple systems in unison and links security solutions in order to achieve the best possible results. This emerging fintech trend associates wide-area networking with modern network security services in order to offer a secure and comprehensive cloud service. Solutions like SASE help fintech businesses protect their critical assets while maintaining their functionality as well.
3. Increased Reliability on Advanced Blockchain Systems
Soon after their entry into the fintech domain, blockchains have established themselves as highly decentralized and secure data flow systems. They offer highly advanced security features like storing critical data as cryptographic hashes in a link-node system. This makes hacking into the system particularly troublesome for the hackers as it's extremely difficult to decrypt every node in the link. The niche of global finance calls for the inclusion of these systems since they make seamless and secure transactions possible, which is why they are likely to become a staple for the fintech industry soon.
4. New Regulatory Technologies (Regtech)
Governments across the globe are on a constant lookout to enforce broader cybersecurity regulations and under such a scenario, the increasing prominence of Regtech means more sustainability for fintech security. These novel technologies have been built to manage and assess big data usage and ensure that fintech is meeting the compliance requirements. Regtech generally includes de-identification processes and data encryption which are meant to ensure consumer privacy on a larger scale.
5. Multi-cloud Data Storage
In the case of fintech, it is generally not advisable to rely on singular public cloud storage systems as they can't meet their data security and varied data storage demands. Instead, it is often preferred to depend on the safety of a private cloud. For best results, leading fintech is now relying on multi-cloud solutions. Multi-cloud solutions give businesses enhanced security and greater transparency in their data usage while providing a backup system for storing vulnerable data, thereby offering a multipurpose solution to their complex security problems.
6. Smarter Security Solutions
With each passing day, the number of threats awaiting to exploit the vulnerabilities in fintech businesses, their users and devices is increasing massively. Moreover, in the years to come, fintech is going to handle more and more sensitive user data and this calls for the implementation of smart security solutions. Implementation of technologies like IoT (Internet of Things) where several devices communicate with each other and transmit valuable information regarding security and vulnerabilities is not uncommon these days. The adoption of AI for threat detection has also made it difficult for hackers to exploit and make brute-force entry to sensitive business infrastructure.
With emerging security trends and a world of safer data taking the forefront of technological innovations, we can look forward to tools like AI and machine learning to become standard security flag bearers in fintech cybersecurity. Similarly, blockchain and Regtech are emerging as useful tools in the fight against cybercrime. The next major step towards a safe fintech ecosystem will be developing an organization-wide security strategy and ensuring its proper integration. Thereafter, the true potential of fintech can be efficiently maximized with safer data security across the whole marketplace.