One of the essence of fintech is the ability to send money online or through a mobile phone from one person to another. Since it involves keying in of financial details of a party, data integrity and security are paramount considerations. Where a person has doubts as to the security of their financial or personal data, he/she would not attempt an online transaction.
Continued growth of the fintech sector requires that the consumers gain confidence in the various platforms involved in different aspects of fintech such as payments, crowdfunding, remittance and peer to peer lending. If customers lose trust in a fintech company, it cannot survive. With the ever increasing cyber threats including individual hackers, organized hackers and sometimes foreign government sponsored hackers, data safety and security remain the greatest single challenge for fintech companies.
However, all is not lost. There are various ways of dealing with the menace. In 2016, Accenture published a report dubbed “the state of cybersecurity and digital.” The report suggests that organisations should not only focus on state of the art technology but also state of the art cyber security. An organization should be ready to adapt to the ever changing cyber threats. Key areas of focus should be:
- Technology detection and response
- Organizational party
- Budgets and funding
The role of enterprise security in the fintech sector is very important because of the sensitive nature of transactions involved. Enterprise security should make it possible to detect and respond to both internal and external attacks. Further, it should simplify threat management, minimize risk and safeguard your business.
HFS Research and Accenture found out that fintechs are making substantial investment in technology defenses, behavioural analytics tools and many more. Unfortunately, many fintech startups do not have adequate skilled manpower to be able to make maximum use of the existing technology security. Additionally, they are riddled with other challenges including budgetary constraints, disparity in security maturity in different firms, theft of corporate information by outsiders and insiders among others.
The challenge of hiring and training security talents
Many fintech companies lack the requisite preparedness to deal with cyber insecurity. This is mainly due to budgetary constraints. Hiring technology security experts or training own staff to the required level requires a lot of money, which is not always in the reach of many fintechs, which are actually startups without adequate financial resources. Enterprise security requires more than just hiring cyber security experts. They should attend continuous training to keep abreast with the latest in cyber security.
Impact of new technology
Some fintechs depend on old methods of maintaining security such as firewalls and encryption. However, these methods are no longer adequate because cyber threats have evolved to become more sophisticated than before. Therefore, fintech firms should focus on the acquisition of new skills such as artificial intelligence, behavioural tracking, data anonymization and tracking all of which are capable of preventing cyber threats.
See How To Be Cyber Savvy As A Fintech Expert