Fintech businesses will face a lot of security threats in 2022. In this blog, we will see the top 6 Cyber Security Threats in Fintech Industry.
Cyber Security threats in the fintech industry are growing rapidly. Experts expect that it will cost companies around the world over $10tr. The constant attacks by hackers, resources spent on navigating the attacks, the staggering recovery costs, and inactive operations can cause financial and reputational ruin for companies across the world in multiple industries.
These threats also mitigate any trust customers have in a business, causing customers to switch to competitors. The criminals in the cyber world are becoming more advanced while the solutions to their attacks are failing to keep pace. Senior management must step in and tend to these issues and employ alternative tools instead of old ones.
The old tools are no longer effective in keeping up with the attacks. Currently, global businesses struggle to find alternative solutions to legacy IT security tools, while attackers have become more sophisticated and their attacks more expensive. In the world of business, reputation is everything. Once that is ruined,
it is almost impossible to regain the trust of customers. These challenges have led to a surge in demand for competent cyber-security professionals. The world’s top firms are paying lucrative contracts even at the entry-level to secure the services of cyber-security professionals. For those interested in pursuing a career in cyber-security, you can earn a Master of Science in Cybersecurity online and complete it at your pace. With that said, let’s explore the latest threats to fintech businesses in 2022.
Fintech businesses will face a lot of security threats in 2022. We will discuss the most important ones they should be aware of. Here is the list of 6 Cyber Security Threats in Fintech Industry.
Top 6 Cyber Security Threats in Fintech Industry
1. Cloud Computing Security Issues
Currently, cloud-based platforms are critical to most businesses that provide financial services like digital wallets, payment services, and online banking services. Due to the large amount of data traveling through these platforms, they are a perfect target for hackers looking to steal valuable information. Companies that provide the services mentioned above are looking for businesses that provide a reliable cloud platform with the latest and proactive security approach.
2. Malware Attacks
Malware attacks are one of the most common attacks perpetrated by hackers. The most famous example is the multiple attacks on the Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT. SWIFT was a protocol heavily relied upon by financial institutions and banks. After the attacks, these institutions switched to blockchain-based payment protocols. Despite this, malware attacks still pose a credible threat. It is because malware attacks are versatile, unlike other attacks.
They can use multiple entry points from various sources like emails, shady websites, pop-ups, third-party software, among others. Lastly, these attacks can steal a large amount of information and cause an entire network to crash.
3. Application Breaches
Applications are critical for fintech businesses. They use them to gather sensitive data from their end-users who need to transfer money. It makes applications an attractive target for hackers. Applications are easier for hackers to get into than a business’ network because they are user-facing. However, if hackers gain access to the application, it will not take them long to access your entire network. Regularly scanning for any vulnerabilities in your applications is critical to preventing any breach.
4. Money Laundering & Cryptocurrency
It seems cryptocurrencies are all anyone talks about these days, especially from an investment point of view. It is due to the dramatic entrance made by bitcoin in the financial world. Now, cryptocurrencies are at the forefront of the financial world. They are also, however, a security threat for fintech businesses. Since it is impossible to track the origin of the money, it is to launder money for criminals.
Hackers also use cryptocurrency transfer to gain an entry point for stealing valuable data. It can cause massive financial losses as well as legal problems. It is paramount that fintech businesses use mainstream currencies and platforms to deal with cryptocurrencies.
5. Identity Theft
Most financial businesses use fingerprints, passwords, or single payment options to safeguard against any threats. However, there are shortcomings to these approaches. They can easily be replicated and used as an entry point by hackers to steal large amounts of money. Businesses should use more than one verification method to counteract the risks, and each of those methods should be built on different technologies and principles.
6. Compliance Regulations Falling Behind the Technology Due to Rapid Advancements
Technology is advancing at a rapid pace. Due to this, most institutions, including government agencies, are unable to keep up. The main reason for the success of the fintech industry is speed. Unlike banks, fintech businesses can adapt alongside customer demands. They are able to do so because they are not bound to the same rules as traditional financial institutions. Regulations are beneficial for most fintech startups. Offering security that protects the customers from data breaches is a selling point that appeals to individuals who worry about unknown companies handling their banking information.
It is also critical for startups to provide evidence that they are doing everything they can to defend the privacy of their customers. However, due to the rapid advancements in technology, compliance regulations have fallen behind. There is a risk that businesses trying to get to the market faster ignore cybersecurity altogether. If they choose to do so, there is no law that stops them.
Conclusion
The fintech industry is a fast-growing one. The only industry that develops just as fast is the cybersecurity industry. However, it has struggled to match the speed of attackers. Cyber attacks are a growing cause for concern for all organizations worldwide. The attacks have increased by more than 500% during the Covid-19 pandemic. In 2022, fintech businesses need to deal with many cyber security threats.
The old solutions designed to prevent hacking have struggled to keep up with hackers and their ever-changing attacks. Companies have suffered damaged reputations and staggering financial losses because of it. Not only that, their customers have flocked towards their competitors in hopes of protecting their data from hackers. Organizations are now looking for next-generation tools to protect themselves from hackers as the old legacy identity authentication solutions are not viable.
