Thirty-one percent – that’s the increase in cyber security attacks within the past year. Per company, attacks increased to an average of 270 attacks per year.
Keeping your sensitive data and systems safe is important for any industry, but some industries have their own cybersecurity challenges. Fintech security is one such industry.
When you’re dealing with around-the-clock financial transactions such as deposits, withdrawals, and payments, every transaction has to be secure and has to be trustworthy, otherwise, you risk losing money – and your customers’ trust.
Not every hacker is an ethical hacker. Many see your vulnerabilities as their next big payday.
So how does cybersecurity work when it comes to fintech products and services? Keep reading to learn more.
What Is Fintech?
Financial technology (fintech) is a broad term used to refer to financial services that use technology to provide financial services to customers. Originally the term was for traditional financial institutions like banks, but as technology evolved the term fintech changed to refer to technology that disrupts traditional financial services.
Some examples of fintech include payment processing services like Stripe. It could also include a cryptocurrency app used for trading Bitcoin and other cryptocurrencies. Another example is investment apps like Robinhood.
Other examples of fintech include Robo advisors, peer-to-peer lending apps, and payment apps.
What Is Cybersecurity?
Cybersecurity, (also known as cyber security, computer security, or IT security) is the practice of protecting important and sensitive data. This could include computers, networks, mobile devices, and other hardware and software.
Cybersecurity has grown a lot, especially with the rise of smart devices and Web 3.0. In a connected world, everyone benefits from good cybersecurity.
The Importance of Cybersecurity for Fintech
When it comes to financial technology, cybersecurity is of utmost importance. While fintech can make it easier for consumers to trade stocks, loan money, and more, fintech is also a prime target for malicious hackers.
Any time there’s money involved, hackers are going to see it as a potential payday and make your company a target. Banks may seem like the obvious target, but fintech companies are banks’ big competitors, and they often lack the security of big banks. As a result, fintech companies are a natural target for hackers.
The popularity and success of cryptocurrency is a perfect example. Some of the biggest hacks in recent years have been cryptocurrency hacks.
Check out the list of major cryptocurrency hacks in recent years. Ronin Network was hit with a hack earlier this year and lost assets to the tune of $614 million. In 2021, Poly Network was hacked, and a hacker transferred $611 million worth of tokens to multiple crypto wallets they controlled.
Some crypto exchanges like Mt Gox have even been hacked multiple times. That’s why it’s important to only use trusted crypto exchanges.
Crypto wallets are also hackable. Crypto wallets are digital wallets for crypto.
This digital wallet could be an online or “hot wallet” or a “cold” wallet that is not connected to the internet. “Hot” wallets are more vulnerable to hacking due to requiring an internet connection. However, cold wallets aren’t immune to hacking.
Being a victim of a crypto hack like Bitcoin can be scary. However, not all hope is lost. If your wallet has been hacked, it’s possible to recover a Bitcoin payment.
Maybe you’ve been scammed by someone or have had your Bitcoin wallet hacked. Either way, a professional, ethical hacker can help you recover lost or stolen Bitcoin.
How Cybersecurity Works in Fintech
Fintech companies have a lot of strategies they use for cybersecurity.
One of the greatest threats to fintech security is employee behavior. Employees are often lax with password management. In one study, 49% of fintech employees admitted to finding ways to work around security policies.
Educating employees on the importance of good password management is essential cybersecurity training. They may give up on creating unique passwords for multiple services, leading to using the same password across multiple accounts. Or they may use passwords with personally-identifying info, such as birthdays or pet names.
Aside from educating employees on how to create strong passwords, multi-factor authentication can also greatly increase security. People are the weak link when it comes to security.
Encryption refers to encoding data in a way that it can’t get deciphered unless a key is used to decode it. One example is 3DES or Triple DES encryption, which is used to encrypt electronic payments.
3DES is also a great example of how security for fintech is constantly changing. 3DES is no longer considered secure and will be retired for new applications after 2023. AES (Advanced Encryption Standard) will replace it.
Fintech security requires ongoing testing, and building a security team immediately is of utmost importance. Running penetration tests (faux attacks on your services) can detect vulnerabilities before malicious actors can act. An IT security audit can uncover additional security flaws.
That’s why postings for cybersecurity jobs ask for experience with penetration testing, system engineering, or software development experience. Many ask for cybersecurity certifications such as CISSP (Certified Information Systems Security Professional), CISM (Certified Information Security Manager), or CompTIA Security+.
It may sound counterintuitive, but hiring a hacker for cyber security can make sense too. Having a hacker test your security can help identify any issues you may have overlooked.
When it comes to fintech, cybersecurity is always evolving. Good cybersecurity is proactive, not reactive. It’s a must if you want to keep you and your customers’ financial transactions safe.
If you’re looking to test your organization’s security, or if you need to recover your lost crypto wallet, Hire a Hacker can help.