Why Businesses Need Multi-Factor Authentication During This Festivity
The buzzings that come with holidays and festive periods are not limited to physical spaces, they also extend to the online space. There is usually an increase in online shopping and trends which result in a rise in online fraud this season. Cybercriminals leverage this to hack businesses, leaving customers’ data at risk. This is why and where businesses need Multi-Factor Authentication (MFA) during the festive period. What is Multi-Factor Authentication or MFA? MFA is a method of cyber security that requires that users provide more information besides their password or username before they can access their digital accounts or systems. It is also referred to as Two-Step Verification or 2FA. This method is put in place to keep your account still safe even when hackers have discovered your username or password. An example of an MFA is what you encounter when you try to sign into one of your accounts on a new device. You are then asked to prove your identity by providing additional information like a code that will be sent to your phone or a biometric scan. 5 Reasons Why Businesses Need MFA/2FA As an online business owner, data protection should be one of your topmost priorities. This isn’t just as it concerns your business but also your customers. Moreover, Microsoft says more than 99.9% of cyber attacks can be averted by MFA. Let’s then examine some of the benefits of MFA/2FA to your business. 1. Fortifies Customer’s Security Since MFA requires that customers provide details that are more personal to them, accessing their accounts becomes difficult for cybercriminals. Even when the first factor (login detail) fails, the second or third factor will still safeguard their accounts. 2. Complies with GDPR & HIPAA Regulations To meet GDPR and HIPAA regulations, you need to prove that your business makes provisions for the safety of your customers’ data and mitigates risk. One of the ways to achieve this is to put security measures like MFA in place. Failure to meet these regulations often results in fines and legal issues. You can check our GDPR Checklist here. You can also learn about NDPR Compliance and Nigeria Data Protection Act. 3. Minimizes Identity Theft, Fraud & Data Breaches On the part of a business owner, MFA significantly reduces the chances of data breaches to a minimum level. Just so you know, the consequences of data breaches could be gross for a business. It can cause loss of reputation, financial loss, and legal liabilities. On the part of your customers, gone are the days when cracking a single password is all that hackers need to carry out fraudulent activities. MFA has made cybercrimes harder to carry out. 4. Builds Trust and Reputation The incorporation of MFA into your business is a guarantee to customers that their data and assets will be safe with you. Even though MFA processes may be daunting to some customers, they will still earn you and your business trust and reliability from them. 5. An Affordable Security Measure Compared to the losses data breaches will cost you, MFA/2FA is cheaper to implement. Whether you are a small, medium, or large-scale business, MFA is an effective and inexpensive solution to security worries. You will then have the time to focus on growth and other important projects. Types of Multi-Factor Authentication There are many ways to implement MFA, but they are broadly categorized into two. The two types of MFA are Adaptive Multi-Factor Authentication and Active Directory Multi-Factor Authentication. 1. Adaptive Multi-Factor Authentication Adaptive Multi-Factor Authentication is a type of MFA that changes the mode of authentication based on the risk involved. This is to say that the more sensitive and risky your level of operation, the more details you have to provide. This is why it is also referred to as risk-based authentication. An example of adaptive multi-factor authentication is when you require only a password to access your bank app, but an additional PIN to transfer funds. 2. Active Directory Multi-Factor Authentication Active Directory Multi-Factor Authentication is a type of MFA owned or introduced by Microsoft. It is widely known and used by many business owners. Examples of Active Directory Multi-Factor Authentication are: 5 Best Multi-Factor Authentication Tools For Your Business There are tons of MFA software on the internet, but we have compiled the five best MFA tools to make your search faster and easier. IBM Verify is an MFA tool known for providing an updated wide range of MFA services. It offers passwordless authentications, TOTP, voice callbacks, email and SMS OTPs, and adaptive authentication. Microsoft Entra ID is a cloud-based identity and access management tool. It is best for SaaS applications, cloud apps, and internal applications. Its MFA methods include Single Sign-On (SSO), OATH tokens, passkeys (FIDO2), and many more. Cisco Duo security is also an MFA access management software with a peculiarity of preventing credential-based security risks. It offers MFA methods like DuoPush, tokens, passwords and biometrics. Cisco secure access also offers adaptive MFA based on users’ location, health and behaviour Okta Adaptive MFA is another tool characterized by securing access to data and apps in a wide range of environments including cloud and mobile. Its MFA methods include physical tokens, biometrics, adaptive MFA, one-time passwords, and many more. LastPass is an MFA tool that manages passwords and provides solutions to authentication problems. Its MFA methods help secure access to online resources, accounts and applications. LastPass also makes provision for a wide range of MFA methods including MFA for VPNs, hardware tokens, biometric verification, and many more. Conclusion: Safeguard Your Business with MFA As businesses navigate the festive period, ensuring the data security of their customers and operations is important. Multi-Factor Authentication (MFA) offers a robust and cost-effective solution to reduce cyber threats and build customer trust. By implementing MFA, you are not only protecting your business but also avoiding data breachesMulti-factor authentication. For expert advice on adopting MFA and other cybersecurity measures tailored to your business, Johan Consults is your trusted partner. With years of experience in providing top-notch security solutions, we specialize in helping businesses like yours stay secure. Visit www.johanconsults.com to learn more about how their
How Internet Fraud Impacts Small Businesses and How to Protect Yours
Internet fraud has existed since the start of e-commerce trade in the late 90s. At that time, the person committing the crime uses the identity of a prominent person to fraud big companies. Awareness about internet fraud, data protection and compliance follows almost immediately. The Big companies were all on alert and their guards up. However, the struggles never ended, and now internet fraud is as prominent among small businesses as it is among top firms. A recent study from Accenture, as referenced by the US Small Business Administration, shows that only 43% of cyberattacks target small businesses. So, let’s dig into this. What are the threats of internet fraud? How does internet fraud affect your Small business? Are there strategies on how to protect your small business from internet fraud? Continue reading to get answers to these questions. The Growing Threat of Internet Fraud First off, what is internet fraud? Internet fraud, often called Internet scams, is using online software or services to exploit an individual or company, the victim. Generally, internet fraud covers any form of criminal activity that occurs over the internet. Examples of internet fraud include crimes like identity theft, hacking, phishing, etc. Internet fraud is a punishable offence under several federal laws across different countries. There is EFCC in Nigeria, the Department of Justice in the US, NC4 in Kenya and the Tanzania Communications Regulatory Authority (TCRA). Despite all these regulations, internet fraud is still a growing threat. As businesses, small, mid-sized or big, try to break into the internet for obvious reasons, they are also open to several forms of threats. For instance, there was false news this year about UNICEF running a cash promotion through mobile money in Tanzania, Kenya and Uganda. A Nigerian in the UK also hacked the accounts of several people and real estate businesses, swapped their account details with his and received their money into his account. A US attorney also said, “Case is a stark warning to businesses, particularly small businesses often lacking robust cybersecurity measures.” Internet fraud can specifically affect small businesses in several ways. Importantly, this fraud leads to financial losses and a damaged reputation (a bad scenario for a rising business). The effect of financial losses can lead to operational disruptions and even severe legal consequences to the company. Common Types of Internet Fraud Targeting Small Businesses The first step in winning against the increasing internet fraud against small businesses is to be aware of what you are against. Here are some common types of internet fraud targeting small businesses: Phishing Scams This is a type of online fraud where internet fraudsters use fake emails, websites, sms or even phone calls to trick people into sharing their personal information. For instance, you can receive a call from an unknown source claiming that your business account is having certain issues and they need your attention to fix it. They’ll often tell you not to bother coming to their office and simply provide certain information. This information will then be used to defraud you. You can read about a recent phishing case on Technica. Ransomware Attacks A ransomware attack is another type of internet fraud that is a growing threat among small businesses. Cybercriminals use malicious software to lock a victim’s computer data and ask for a ransom in exchange for their data. According to a survey by Hornet Security for Q3 2024, nearly 56% of all the ransomware attacks impacted small businesses. 1 in 5 of these businesses paid the ransom to recover their data – 22% higher than the average. The reason isn’t far-fetched but most of the small businesses aren’t prepared for the attacks that come with it. Invoice and Payment Fraud Another common type of internet fraud against small businesses is invoice and payment fraud. This is a well-coordinated type of fraud where online scammers defraud a business into paying an invoice into a fake account or completely falsifying the invoice. In 2023, Irish SMEs lost €10 m to invoice and payment fraud. Also in Australia, a small business narrowly escaped being scammed of almost $940,000 by a single payment redirection scam. It is thus very important to always double-check invoices before making payments. Business Email Compromise (BEC) Lastly, we have the BEC. Business Email Compromise is a type of internet fraud where a scammer impersonates a trusted person with a company. This can be a staff or a business partner and the goal is to ask for certain payments or sensitive information. It’s simply leveraging social engineering to gain trust and explore vulnerabilities with a firm. BEC is a serious crime that has cost a lot of people over the years. You can check out what Tripwire has to say about over 55bn lost worldwide in the last 10 years to BEC. How Johan Consults Protects Small Businesses Internet fraud is a dynamic game and is even considered the biggest game of all time, bigger than sport. Thus, someone familiar with the game must help you in winning. At Johan Consults, we have a dedicated team of experienced cybersecurity professionals who can help secure your business against any threats. We are a leading data security firm with operations all over the world. At Johan Consults, we can also help you in training your team to recognize internet fraud tactics. We provide training on GDPR, KDPR, NDPR, ISO, DPO, DPCO and advanced masterclass training. You can read to learn more about ISO training. How do I Protect My Business from Internet Fraud If you are looking for a way to step in yourself, there are a few things you can do. Firstly, you must monitor and audit. It is important to regularly check for any unusual activities. Even when you’re trained to spot certain odd gestures immediately, there is still a need to do regular checks. This will help you spot misappropriations that are just creeping in, lapses from your employees, and oversights. Secondly, in the case of ransomware, you can purchase
Data Leakage Protection: The #1 Overlooked Security Risk
As an organisation, you will gather, process, use, and store data—both consumer data and the enterprise’s own data (financial reports, marketing strategies, employee information, etc.). But you’re at risk of constant data leaks, and a data leakage protection system is important to prevent reputational damage, financial loss, and legal consequences. What is Data Leakage Protection? Data leakage protection is the total cybersecurity processes and technologies used to protect sensitive data and business information from loss, corruption, deletion, and, above all, leakage. Similar to data loss prevention, it’s an all-round cybersecurity measure that ensures organisations keep their data in and simultaneously avert the negative consequences of data compromise. Additionally, data leakage protection (DLP) ensures enterprises maintain compliance with relevant data regulations, e.g., GDPR and NDPA. What Is a Data Leak? A data leak happens when sensitive information is accidentally and unintentionally exposed to unauthorised parties. Data leaks can occur via the internet, physically through devices, or as simple as sending emails to the wrong recipients. Although the term sounds similar to ‘data breach,” where data leaks are usually accidental, data breaches result from malicious intents, especially from the outside. What causes data leaks? Data leaks are commonly caused by poor data security that allows just anyone through, weak or stolen passwords, a lack of employee training, and even physical attacks. But data leaks happen in one of the following ways: Accidental Data Leaks: most data leaks are intentional and occur from mistakes such as sending sensitive mail to the wrong recipient(s). Some happen due to wrong data security settings that usher hackers in. Insider Threats: Like data protection in the fintech industry, insider threats remain a stumbling block to cybersecurity. A current or former employee or contractor with access to sensitive information may decide to leak it for malicious intent. Malicious Attacks: To gain access to sensitive data, cybercriminals use several technologies to attack the organisation’s database. These cyberattacks come in the form of malware, ransomware, and phishing attacks. Once unauthorised access is gained, data exfiltration takes place. Why is Data Leakage Protection Important? It doesn’t matter whether it’s customer details, financial documents, or even business plans; once data lands in the wrong hands, severe consequences follow. First is reputational damage; clients will lose trust in the brand, leading to drawbacks in the order of business. Second, for every occurrence of a data breach, fines and sanctions are imposed by data regulation. Take, for example, when the NDPR fined fidelity bank for a data breach. These setbacks incurred from data leaks and breaches destroy business deals and jeopardize more opportunities for the victim company. Now, digital transformation makes protecting data difficult; every company prefers remote work, and cloud storage is the main deal now. This puts data security in a delicate situation because these serve as an entrypoint for data breaches. Therefore, businesses must come up with a data leakage protection policy that guards against data loss or leakages. How Does Data Leakage Protection Work? A data leakage protection solution works by scrutinizing the content and context of data moving in, out, and around the organization. It’s an absolute analysis that includes emails and even data sent through text messages. Safe to conclude, a data leakage protection system carries out:Content Analysis: where the solution uses a variety of tools and techniques to ensure the specific content of messages and internet traffic meet the predetermined policies. Context Analysis: the scrutinisation of external factors such as file size and format of a message. Once a data leakage solution senses the data doesn’t meet the set requirements, it prevents such data from leaving the organization. At the same time, it alerts the data security team of a potential data leak or loss. Here are some of the techniques most DLP solutions use: Categorisation: Examines data types to detect sensitive information and prevent potential compliance risks. Exact file matching: compares unique file signatures to identify identical data sets precisely. Partial data matching: identifies complete or partial matches of specific file contents. Statistical analysis: Applies advanced machine learning techniques to automatically detect and flag potential data leak risks. Regular expression matching: scans for specific data patterns like credit card numbers (16 digits), Social Security numbers (9 digits), and other structured information formats. What Are the Features of a Data Leakage Protection (DLP) Solution? Data leakage protection (DLP) solutions are comprised of cybersecurity tools designed to prevent unauthorised data exposure and safeguard sensitive information across an organisation’s system. Here are the 7 key features of an effective Data Leakage Protection (DLP) solution: Benefits of Data Leakage Protection The benefits of a data leakage protection system are numerous and straightforward. Conclusion Data leaks happen unintentionally but they are preventable. Investing in a comprehensive data leakage protection system enables the organisation to curb data loss or leaks. Summarily, the importance of data leakage protection in cybersecurity is immeasurable, as it prevents breaches and boycotts legal penalties from data regulations. Frequently Asked Questions What’s the difference between data leak and data breach? Data leaks are often unintentional and may result from inside the organisation, while data breaches are malicious in nature. What’s the difference between data leakage protection and data loss prevention? Data loss prevention primarily focuses on preventing data from being accidentally or intentionally lost, destroyed, or rendered inaccessible. While Data Leak Protection specifically targets unauthorised data exposure or transmission outside organisational boundaries. What does DLP stand for? DLP may stand for data leak prevention, data leakage prevention, data leak protection, data loss prevention, or data loss protection
Data Loss Prevention (DLP): The Silent Killer of Your Business
The consequences of data loss have never been higher; data must be shielded at all costs. So, this blog provides more information on the prevention of data loss. What is Data Loss Prevention? Data loss prevention (DLP) is the process of detecting and preventing data breaches, exfiltration, and even misuse by using cybersecurity strategies, processes, and technologies. The root of this equation is data; it’s a common factor for all businesses and organisations worldwide. What’s it used for? A typical organisation (business or not) keeps client data—personal, sensitive, etc., for record keeping, transaction processing, marketing, and competitor analysis. Cybercriminals use this data for varying reasons, majorly money-driven. While organisations keep them for ease of business and eventually increased profitability, cybercriminals make money off data through financial frauds, identity thefts, etc. The landscape further worsens with each technological advancement. Now, thousands of authorised users access the company’s database through cloud and on-premises facilities. Therefore, there’s a need to implement strategies to prevent data loss. With DLP, organisations detect data threats faster than usual. How? It tracks data throughout the system and implements security policies on that data. Organisations typically use DLP to: Why is Data Loss Prevention Important? Data is never safe; it doesn’t matter if it’s in use or at rest, making data protection and security complicated. Despite the stress, data loss prevention is the best step. Why? The costs of data loss surpass the technicalities of its prevention. According to the cost of a data breach report by IBM, the average cost of a data breach reached USD 4.88 million, a 10% jump from the previous year. Protecting data, particularly personal identifiable information (PII), became more difficult because data may be used and stored in several formats in multiple locations across various departments. Therefore, there’s a need to monitor each data point and enforce the necessary policy for it. Given the vulnerable nature of data, an ideal data loss prevention system must be able to monitor data when Types and Causes of Data Loss Data loss is often defined as events of data breaches, data leakages, or data exfiltration. Though used interchangeably, these terms have distinct meanings. Data breach: A data breach is any incident that leads to unauthorised access to data. Under this, we have cyberattacks and other incidents that allow unauthorised access to sensitive information. Data leakage: Like the name leakage, data leakages include accidental exposure of sensitive information to the public. This can occur from procedural security errors from both electronic and online transfers. Data exfiltration: This is any theft where the attacker (hacker) successfully moves stolen data to a device under his control. Data exfiltration cannot occur without a breach or leakage, but not every breach/leakage leads to exfiltration. Since data loss has been defined and categorised, let’s see its causes There are 3 Common Causes of Data Loss Cyberattacks Malicious actors target data all the time—relentlessly. To help their cause, they employ several techniques such as phishing, malware, and ransomware. These are the prevalent types of cyberattacks Insider threats Authorised users, such as staff, third parties, stakeholders, providers, etc., might put data at risk through carelessness and malicious intent even. It’s as simple as not updating passwords or even carelessly revealing sensitive enterprise data, etc. while using public networks. Malicious or not, insider threats remain very costly considering IBM’s report. Smartphone or PC theft An unattended device attracts thieves. It doesn’t matter if the thief pawns off the device; the organisation suffers the cost of cutting the stolen device off and replacing it. On a serious note, such incidents grant malicious users direct access to confidential or sensitive data. Data Loss Prevention Policies One thing about DLP is the wide coverage, from data classification, access control, and encryption standards to technical controls. With data loss prevention policies, the standard is clear: employees know their duties regarding data protection and security. In addition, it allows for proper staff training on data security best practices such as threat identification, data handling, and incidence reporting. Also, rather than a generalised security approach, with DLP, data is classified, and implementing appropriate security protocols for each group becomes easier. For example, handling PII (personally identifiable information), such as credit card numbers, social security numbers, etc., is subject to certain data security regulations. Meanwhile, the company can choose to do whatever with its own intellectual property (IP). These types of data require different security procedures; hence, tailored DLP policies are necessary. The Types of DLP Solutions It’s important to understand the different facets of data loss prevention for better comprehension. There are 3 types of DLP: Network DLP Network DLP solutions monitor how data moves through—in and out—networks. With tools like artificial intelligence (AI) and machine learning, they flag anomalies that signal data loss in a network. Although network DLP solutions monitor data in motion, many check data in use or at rest too. Endpoint DLP Endpoint DLP tools monitor data use activity on laptops, mobile devices, servers, and other devices accessing the network. These solutions are directly installed on the devices and even go the extra mile to block unauthorised data transfers between devices. Cloud DLP Cloud security solutions focus on data stored in and accessed by cloud services. They scan, classify, monitor, and even encode data in cloud repositories. Particularly, these tools help implement access control policies on individual end users and any cloud services that might access company data. How DLP Works DLP is typically a 4-step procedure for many security teams. The steps are:
Data Security in Banking Industry: Its Importance, Threats and Solutions
The banking industry evolved spontaneously in the last decades like every other industry. The financial sector embraced new technology and found ways to implement a “customer first” approach to its services. While we acknowledge the benefits it brings (ATMs, mobile apps, online customer care, etc.), we see and fear the dangers that follow. This adoption of digital tools shows a strong need to prioritise data security in the banking industry. To prove the relentless onslaught of cyberthreats, cybersecurity ventures estimate the global cybercrime cost will reach $10.5 trillion by 2025. Also, statistica ranks the financial sector 2nd based on the average cost of a data breach. So what’s next? Premium data security! In this blog, we’ll go over the importance of data security in the banking industry, threats to it, and how to solve them. Why is Data Security Important For Banks? One thing every industry runs by is data, and the banking sector isn’t left out. There’s a lot of data out there, and banks make use of a wide range. Yes, they use, handle, and store basic personal data like name, age, address, etc., but there are more delicate data at stake (BVN, NIN, credit card details, etc.). These kinds of data attract cybercriminals who use them for financial frauds, identity thefts, targeted attacks, and many more. So, stopping malicious actors from accessing sensitive data remains the ultimate goal for the banking industry. But that’s not all; there are other consequences of cyberthreats that data security curbs. Some are; Loss of Trust and Reputational Damage Trust is the bane of every banking institution. It’s so easy to know why customers place so much trust and expectations in their banks to keep their information safe. Terribly, data breaches shatter this relationship. While the same customers may grant other industries a second chance, they don’t give banks the same regard (money is a factor). Once a data breach occurs, the trust is broken and the reputational damage irreparable. Compliance with Regulations Banks must comply with a number of data regulations to achieve maximum data protection and security. These laws were enacted by countries and industries to grant data subjects (data owners) more control over how organisations use their data. For instance, the GDPR governs the EU, and its requirements remain applicable to all organisations handling EU data regardless of their location. Also, all Nigerian banks are subject to the NDPA (Nigerian Data Protection Act). Under these laws, compliance is non-negotiable, and severe consequences follow traces of non-compliance. So, data security in the banking industry ensures data integrity and improves compliance with these strict laws. Financial Loss Not complying with data regulations comes with heavy financial implications. Why? The regulations place heavy fines on non-compliant organizations. For instance, the NDPC fined Fidelity Bank for the use of the data subject’s information without consent. Aside from the penalties imposed, there are several procedures necessary to minimise the impact of a data breach, and they don’t come cheap. This and lawsuits by customers puts banks in serious financial crisis. To prevent such sticky situations, banks are better off implementing maximum data security measures. It’s a ‘better safe than sorry’ situation. 5 Common Threats to Data Security in Banks With massive amounts of sensitive and personal data possessed, banks remain a constant target for cyberattacks. While the banks put up some kind of effort, the ever-evolving modus operandi of cybercriminals undermine it. Now, banks must stay aware of the potential types of cyberattacks coming and plan accordingly. Here are the banking sector’s most common cyberthreats. Phishing Phishing attacks remain the biggest thorn in the banking sector’s flesh. According to Statista, in 2023, around 27.32 percent of total phishing attacks worldwide targeted financial institutions. Cybercriminals pretend to be credible authorities and deceive individuals to reveal sensitive details like account number, credit card number, password, etc. Usually, these actors insert links to malicious websites in emails and text messages. When it comes to banking, there’s a special type of phishing called whaling. A common example is an email from a company’s CEO or top official to the finance department. The attacker, posing as the CEO, requests a wire transfer to an external account for a confidential deal. The attacker will include words or operational details to lend credibility to the story. This results in a terrible situation. Insider Threats Not all threats come from outside the bank; some come from inside the bank. Tired and disgruntled workers, contractors, and even third-party vendors pose risks to banking institutions. Because they can intentionally or unintentionally leak sensitive data to unauthorised persons. A real-world example of insider threat occurred in 2019. Capital One experienced a massive data breach when a former Amazon employee exploited a vulnerability in the bank’s cloud server to access sensitive customer information. The breach affected over 100 million customers and caused serious financial and reputational damage to the bank. Distributed Denial of Service (DDOS) DDOS attacks involve bombarding a bank’s online services with so much traffic that the system slows down or crashes. This act makes all online banking and payment unavailable, and it disrupts operations and leaves the system vulnerable to further attacks. Third-party and Supply Chain Attacks No organisation operates alone, and banks are no exception. At one point or another, the need to outsource tasks to external agencies pushes through. Banks rely on third-party vendors to supply various services, from cloud storage to payment processing, and this opens them up to more vulnerabilities. For an effective partnership, third parties need access to certain data, and they may possess poor data security practices. A hit on such a vendor equals a hit on the affiliated bank. Malware and Ransomware Malware is another threat to data security in the banking industry. Malware is malicious software (mal-ware) that attacks a system, steals data, and is even capable of a shutdown. Ransomware, on the other hand, locks users out of their own systems while the criminals request money in exchange for access. Ransomwares contribute a whole lot to the financial costs of data breaches—around $4.54 million, excluding the ransom cost itself. For example,
What is the Importance of Cybersecurity in Fintech in 2024
Fintechs are the main deal now. They serve as evidence of the massive digital evolution happening right before our eyes. As much as fintechs sound like the latest development, the collaboration between the financial and technological industries started with the first ATM. Now, the evolution has grown beyond simple ATMs and traditional banks to mobile apps and online payments. Currently, the entire financial sector uses one slogan, “customer first,” and the emergence of mobile internet made it easy. Bank users can access their accounts from any location using their mobile devices; no long queues at the bank, and no week-long transactions—fintechs embody the word ease. So, where does cybersecurity come in? This blog explains the importance of cybersecurity in fintech. Cybersecurity in Fintech: The Landscape Cybersecurity is the process by which every piece of data, software, and device in an organisation is protected from loss, compromise, and external. Cyber security differs from data security as it’s not limited to data only. It covers every mobile device, computer, drive, laptop, and software that belongs to the organisation’s network. Fintechs operate with large amounts of user data; to open an account, they collect BVN, emails, phone numbers, passwords, credit card details, and lots of sensitive data. What this does is attract vicious cybercriminals, who in turn use this data for identity theft, fraud, and targeted attacks. While fintech companies try their best to outsmart these malicious actors, they’re losing the fight. The situation worsens as cybercriminals use upgraded and sophisticated forms of attack. Certain technologies make it harder for companies to catch up, e.g., Artificial Intelligence AI. Cybercriminals use AI to constantly monitor the cybersecurity network of fintechs for entry points, and it gets the job done fast. Thankfully, there are cybersecurity tools to assist fintechs. Besides the sophisticated mode of cyberattacks, insider threats pose another challenge to cybersecurity in fintech. Records declare Fintech employees as one of the most cyberaware staff across various industries. But, in a recent survey, 49% of fintech staff admit they work around politics for work ease. While it’s a harmless intention, the result leaves room for data breaches to sneak in. So, what is the importance of cybersecurity in fintech? Here’s exactly why fintech companies need to implement cybersecurity systems. To prevent a data breach Presently, more and more companies fall victim to data breaches. In fact, research shows that 6 of 10 businesses fall victim to a cyberattack this year. And more often than not, these attacks are financially motivated, and personal data is the target. Sure, every company handles personal data at one point or another, but fintech companies are on a whole new level. Fintechs handle highly sensitive data that can make or mar their users. On September 11, 2022, Revolut, a financial transactions company, experienced a severe data breach due to a social engineering attack. The breach compromised the personal data of around 50,000 users, including their names, addresses, emails, and payment card information. To prevent a successful data breach and protect their customers, it’s important that fintechs establish a solid cybersecurity plan. To comply with data regulations The repercussions of a successful cyberattack, or data breach, affect the data subject (data owner) the most. For example, in a credit card or phishing effect, it’s the client’s money that gets stolen. Although unfavourable effects might reach the Fintech company, it is often the client’s headache. To grant data owners more control over their data, countries and industries alike established laws and regulations to guide organisations towards data protection. For instance, the organisations in the EU answer to the GDPR and its requirements while the NDPA protects Nigerian data. These data regulations hold companies—fintechs included—subject to them being accountable for the security of client’s data. So, they penalise non-compliant companies with hefty fines or even downtime. For instance, Fidelity Bank, a Nigerian bank, was slammed with a 555.8 million Naira fine in 2024, and many other financial institutions face such, if not worse. The importance of cybersecurity in fintech shines through the fact that fintech companies need it for maximum compliance with the laws. To prevent financial and reputational damage Unlike other industries, it’s extremely difficult for a fintech to bounce back after a successful data breach. Why? With each data breach occurring comes severe backlash. First, we have the reputational damage. No one would walk down an alley infested with bandits. Neither will a smart person keep money in a hole-riddled pocket. Such is the fate of fintechs. Consumers place a lot of trust—and sensitive data—in fintech companies that it’ll be hard to start over. So, fintechs must make cybersecurity important. The financial implications of a data breach cannot be explained enough (data breaches cost a lot). There are lawsuits from victim users, which take a huge chunk of money. Then there are direct expenses like forensic experts, hotline support, in-house investigations, etc. According to IBM, Organizations with a high level of noncompliance show an average cost of $5.05 million, 12.6% higher than average How To Improve Cybersecurity in Fintech Fintech security measures must continuously improve to counter the ever-evolving cyber-attacks. We have an idea of the challenges to cybersecurity in fintech, but how can fintechs overcome them? first, through regular security audits. Fintech start-ups and established companies should conduct an in-depth assessment of their security measures periodically. This allows them to spot and strengthen weaknesses in time. Also, as cybercriminals come up with newer modes of attack, a regular audit lets fintechs update their cybersecurity systems to prevent a data breach. Basic security measures like access controls, layered security, data encryption, staff awareness, etc. are essential to reduce the likelihood of a data breach. Fintech companies should implement access control on a need-to-know basis, so staff have access to only data necessary for their office. Also, access permissions should be reviewed and adjusted regularly to prevent loopholes. Data encryption technology should be implemented to keep data unreadable even when stolen. This technology keeps data safe ‘in transit’ or ‘at rest’.
