FinTech companies have been gaining momentum since the beginning of the pandemic. They have significantly improved their services and even merged with the traditional banking methods. Major banks have integrated fintech into their existing systems to offer more options. So now their customers can transfer, invest, and lend money from their smartphones or any devices.
With that said, the expansion of fintech companies did bring up some challenges, namely when it comes to cybersecurity. Hackers do acknowledge the importance of fintech. They are doing their best to exploit the existing loopholes and outdated technology to create security breaches. There were several high-profile hacks in the last year alone. So which cyber threats are most dangerous to fintechcompanies?
Malware is the biggest problem for all companies because it is becoming more and more advanced every day. Cybercriminals are finding ways to improve their malware attacks, and fintech companies should be aware of that. One of their recent targets was the Society for Worldwide Interbank Financial Telecommunication (also known as SWIFT). Numerous banks around the globe use SWIFT, so the financial data of their clients were at risk.
With that said, malware is behind some data breaches that happened in the last couple of years. Banks and fintech companies have to protect their customer information no matter what. Malware is making things a lot harder for them since it can collect credit card details and create immense losses. Not to forget that fintech companies will not be able to gain their clients’ trust back.
A VPN service could help out with this issue. While most people use it to change their IP addresses, a VPN service can also encrypt sent or received data. It works on a variety of devices which is a plus for mobile users. So even if hackers somehow pass security measures, the encryption will stop them from stealing information.
2. Apps With No Security
Fintech companies offer various apps to international banks, and these can be integrated into their system. These apps are designed to help clients who prefer mobile banking because they allow them to complete transactions with just a couple of taps on their phones. While fintech apps do sound like the future, they could also become easy targets for cybercriminals.
So if your fintech company is making an app or has one already, you need to invest in security measures. The coding needs to be impeccable and updated as often as possible. Hackers are always trying to find loopholes and errors in code. Apps are particularly vulnerable, so make sure your dev team is fully committed to the project.
3. Watch Out For Money Laundering
Cryptocurrencies are used for various transactions by fintech companies. While cryptos are undoubtedly the future of banking, remember that they are still unregulated and untraceable thanks to the blockchain. Criminals are well aware of these facts. They could try to use a fintech company to launder the money.
Fintech companies don’t require the names of their clients. Criminals could exploit this for monetary gain. Tracing back cryptocurrency transactions is incredibly hard, and money launderers see this as an advantage. Money laundering is connected with numerous criminal organizations, as well as funding terrorist attacks.
4. Compromised Cloud-Based Services
Fintech companies incorporate cloud-based services, and they make data management more flexible. These features are essential for online banking. After all, having a digital wallet that is always available makes things a lot easier. Cloud-based services are safe overall, but there is always that risk factor. Your clients trust you with their personal and financial data, so keeping them secure should be your top priority.
It would be best if you chose a trustworthy cloud-service host or a partner, so do good research before you hire anyone. Their cybersecurity measures need to be at the highest standard. You don’t want any data losses or breaches. Remember that your company’s reputation is on the line too.
5. Out of Date Banking Systems
Well-known banks are embracing fintech services and are including them in their core systems. While this step is innovative and will change the banking world forever, some existing banking systems are outdated. Cybercriminals know this and could try to benefit from the oversight.
Both banks and fintech companies should work together to update systems before they integrate new services. Rushing things up could only lead to data theft. An update should patch things up, amp up the security, and create a safe space for online banking.