How to Maintain Cybersecurity in Fintech Companies?
There are more than just money at risk when a fintech company is the subject of a cyberattack. A successful attack will irreparably harm a company’s customer connections, destroy trust, and violate security standards. Therefore, upholding strict cybersecurity standards is crucial for every player in the finance industry.
In this post, we’ll examine the most significant cybersecurity risks facing fintech businesses, the most crucial laws and policies to follow, and some strategies for adopting banking-specific bespoke software to raise a company’s security levels.
First, let’s take a look at legal regulations and policies that define the shape of the modern fintech cybersecurity context.
Fintech policies and regulations
The specific laws that a corporation would have to abide by varies greatly on its nation of origin even though there are similar practices in the world’s fintech legislation. Let’s concentrate on more prevalent laws that are more likely to be followed.
In nations of the European Union, this regulation is in use. “Electronic Identification and Trust services” is what eIDAS stands for. This regulation’s primary objective is to assist in resolving legal issues that occur during electronic border crossing for various financial institutions and individual users.
Although the GDPR is seen as another set of European standards, it is in use globally and must be complied with in order to conduct financial business with European businesses or end users. The GDPR, short for General Data Protection Regulation, adds another layer of data protection and efficiency to banks and covers e-payments.
According to a study by Deloitte, there are some noticeable overlaps between GDPR and Payment Service Providers Directive 2 (or PSD2), and some legal issues may develop if your activity is required to comply with both.
The primary objectives of this new set of regulations, which are an updated version of the original Payment Service Providers Directive (established back in 2007), are to increase competition in the realm of electronic payments and promote the development of new electronic payment methods.
The Financial Conduct Authority, or FCA, oversees financial activity in the UK. FCA’s key objectives are to safeguard end users and raise the general level of market safety. You must also register with the FCA if you wish to launch a fintech project in the UK.
GPG13, or The Good Practice Guide, which follows somewhat stricter rules and legislation, controls the actions of financial firms who work with the British government. GPG13 naturally bears the imprint of relationships with state affairs, and as a result, it has quite strict and thorough restrictions targeted at cybersecurity and deterring invasions.
Make sure your actions comply with the Act on the Protection of Personal Information, or APPI, if you want to work with Japanese financial institutions (from overseas as well). The protection of Japanese residents’ personal information is covered by this collection of rules.
South Korea has among of the world’s strictest regulatory rules as a result of its complex connections with its nearest neighbor. If the Personal Information Protection Act (PIPA) is broken, there may be criminal as well as administrative consequences.
In particular, if a business wishes to provide services for Visa or MasterCard, PCI DSS validation is required. PCI DSS compliance is required regardless of where a fintech company is headquartered if it works with credit cards. This collection of rules is fairly nimble, offering four levels of criteria based on how many transactions a business completes annually.
A collection of regulations used in fintech to guarantee data security. Access control, cryptography, and other topics covered by ISO/IEC 27001 assist fintech businesses in protecting the information utilized in their service delivery.
The financial industry is full of cybersecurity threats, therefore all these laws weren’t made merely for the purpose of bureaucracy.
The most significant threats to the fintech sector
With each passing year, the fintech sector draws more and more capital. It makes the industry a prime target for all types of cybercriminals and bad actors who want to steal money from fintech players by conducting illicit transactions or obtaining access to vital data. Financial service companies are among the businesses that fraudsters target the most, according to an IBM survey.
Due to the complexity of cybersecurity, there is a greater likelihood of errors, which gives criminals more opportunity. Here are some of the most significant security issues in fintech:
- False identity phishing
- Application data leaks
- Money laundering
- Identity theft
With the growth of fintech services and solutions, there are potentially more breaches. Participants in the business employ a wide range of financial security solutions to address this recurring fintech danger.
Cybersecurity solutions in fintech
Any fintech business that values its brand and clientele should make significant investments in cyber security. To create a solid fintech cybersecurity solution, there are various efficient approaches that are frequently used:
Digital information is very well protected thanks to encryption. By creating token vaults and tokenizing data, it can further protect users. It is carried out utilizing a variety of algorithms, such as 3DES or RSA.
Controlled access to information
Only a small number of designated users should ever have access to critical information, and access should be rigorously controlled. A solution should also have tools for tracking all communications with information databases.
Enhanced authentication methods
Strong passwords are obviously a must for any fintech firm, but they are insufficient. Advanced authentication techniques including one-time passwords, brief sessions, and adaptive authentication must be used if you want to guarantee the highest level of security.
A security solution that permanently resolves all potential problems is not conceivable because a fintech organization can never be totally secure from cyber threats. Throughout the whole product lifecycle, security is a process that requires ongoing awareness. A business can employ DevSecOps techniques to sustain this process, greatly enhancing security at every level.
One of the essential categories of cloud services that actually aid businesses in maximizing cybersecurity as part of a digital transformation endeavor is desktops-as-a-service, or DaaS. Virtual desktops and apps are securely delivered via DaaS to any device or location. Controlling and securing computers from any place is made simple with the DaaS solution.
Source: Analytics Insight