All You Should Know About Fintech Cybersecurity
Cybersecurity is the practice of protecting data, computers, servers, mobile devices, software, and all other hardware from malicious attacks. One thing is sure: the most valuable resource in today’s world is data, and it’s a justified fact. One look at the world, and we see an unfathomable evolution—digital transformation. Every industry has begun to embrace the digital space, and financial institutions are not left behind. While we welcome the collaboration between technology and the financial industry, there’s a need to stay on top of the challenges it brings. So, as an individual who finds mobile payments lifesaving or a fintech startup trying to prevent cyberthreats, this article is for you. Read on for the importance of cybersecurity in fintech, the challenges it faces, and the best practices to encourage it. Cybersecurity in Fintech: The Landscape Over the last few years, business as we know it changed, especially the financial industry. The fusion of finance and technology has changed everything. But the dangers increased just as much. When it comes to cybersecurity, the fintech industry can be described with one word, “sensitive,” and its synonyms. Why? To carry out financial transactions on behalf of clients, sensitive data like credit card details, account balances, and pins needs to be stored. Now, cybercriminals attack fintechs for these data—it’s that important. And the modus operandi of these malicious actors do not remain stagnant. They constantly come up with newer and better technology that outsmart whatever defence fintech companies use. All thanks to AI and self-learning software. So, what are Fintechs doing about it? According to Gartner, 75% of companies intend to adopt new solutions that combat the growing global cybersecurity issue caused by new technology challenges. Fintech companies now embrace new cyber solutions and establish partnerships to strengthen their systems against online attacks. Although the careless attitude of employees constitutes some of the chinks in cybersecurity in fintech, fintech employees are part of the most cyber-aware among other industries. To combat the loose-employee side, fintech companies now support cybersecurity with new and better ID solutions. So, let’s move to the fun part. Importance of cybersecurity in Fintech To start with, cybersecurity in fintech serves as a shield for invaluable financial data such as personal information, account details, and transaction details. The consequences of a data breach in the industry can be catastrophic, going beyond identity theft and financial fraud. Implementing cybersecurity is not just a luxury but a necessary practice. It’s important to keep the trust users place in these institutions. When a data breach occurs, fintechs face massive reputational damage, the likes of which they might never recover from. It’s a case of “once bitten, twice shy.” Victims of financial fraud will never trust the institution anymore. To prevent eventual shutdowns due to customer migration and legal consequences, implementing cybersecurity in fintech is crucial. In addition, there’s a need to note that each individual fintech company’s part of a larger network. So, a successful cyberattack in one company is detrimental to others in the industry. To prevent a chain reaction, cybersecurity is best established. The challenges to cybersecurity in fintech Here’s a list of things that make cybersecurity more than a walk in the park Data breaches A data breach occurs when an unauthorised person gains access to personal and sensitive data. This can trigger negative consequences due to the nature of the breached data. For instance, there’s credit card fraud, where cybercriminals clear the victim’s account. And identity theft, when malicious actors perpetrate evil with the victim’s identity. As a fintech company, you must ensure adequate cybersecurity to prevent such occurrences. If not, the consequences will be dire. Insider threat An isider threat is a security risk to data that comes from inside the organisation—the staff. While fintech employees are more aware of cybersecurity than other industries, they aren’t perfect. According to research by the think tank EndPoint Ecosystem, a little over 50% of finance workers believe security policies restrict the way they work, and 49% confess to finding a way to work around their security policies. This shows how much insecurity surrounds data in the fintech world. New technologies The emergence of sophisticated technologies heralds progress and spells doom at the same time. Yes, some technologies are welcome, like the blockchain. Blockchain technology provides a decentralised and immutable ledger that can improve the security and transparency of financial transactions. But other technologies like AI and IoT increase the vulnerability of cybersecurity in fintech to cyberthreats. For example, IoT devices serve as an entry point for cyberattacks, while AI-powered attacks easily find loopholes in the security system. With these, fintech companies best implement authentication and other access control methods to guard up. Compliance with regulations There’s a host of data protection regulations out there, and fintech companies are bound to a few of them. Some of the key data regulations include the General Data Protection Regulation (GDPR), the Payment Card Industry Data Security Standard (PCI DSS), and the Federal Information Security Modernisation Act (FISMA). Non-compliance with these data regulations results in harsh penalties—either monetary fines or outright shutdowns. Now, GDPR compliance does not come cheap; it has some particularly expensive requirements, such as hiring a Data Protection Officer and conducting DPIAs (Data Protection Impact Assessments). The cost of compliance poses a challenge to cybersecurity in fintech, especially startups. Third-party risks Third-party vendors help the fintech industry a lot, especially startups who need to outsource services. Yes, they offer lots of assistance, but they bring additional risks to cybersecurity in fintech. Some third parties may not ensure adequate security against cyberthreats, and any fintech doing business with them becomes vulnerable. The way forward is to make sure to outsource tasks to third parties with adequate cybersecurity measures in place. Best practices for cybersecurity in fintech Since we know the common cybersecurity threats in fintech, now’s the time to learn how best to prevent them and limit their impact. Here’s a list of the best cybersecurity practices for fintechs. Conduct regular audits Regular security audits will help you identify and
The 7 Types of Cybersecurity You Must Know in 2024
What are the types of cybersecurity? Cybersecurity is so important that it can’t be overemphasized. According to Forbes, in 2023, there were 2365 cyberattacks with approximately 343,000,000 victims. How does that affect your organization? A large percentage of the cyber attacks reported were aimed at businesses—small, medium, and large. Actually, 71% of Nigerian businesses faced ransomware attacks in 2021. So, you need to take cybersecurity seriously for your organization’s sake. In this article, you’ll learn the different types of cybersecurity in 2024. What is Cybersecurity All About? Cybersecurity is the necessary process of shielding an organization in its entirety from cyberattacks. In recent times, there has been a rapid growth in the number of cyberattacks on organizations. To further complicate matters, businesses have a hard time fighting back. Some of the factors affecting the strength of the counterattacks are: Remote work: the era of brick-and-mortar work has long since passed and a new work mode has taken over. In fact, the majority of companies at one point or another employed the services of remote workers. An important enabler is the internet, which makes it easier for cyberattacks to take root. Sophisticated attacks: cyberattacks have evolved from what they used to be into a more complex and organized structure. They now operate with better technology, the likes of which most organizations aren’t prepared against. Complex environment: cybersecurity would’ve been more effective if only modern corporate networks worked on just one environment. Instead, it spans over multiple cloud environments and infrastructures. The results of cyberattacks can be devastating. Such breaches lead to loss of intellectual property and customer trust, in addition to the financial and reputational costs. That aside, there’s the matter of identity theft, fraud, and targeted attacks that follow data breaches. Bottomline is that every organization needs to up their cybersecurity game. What Are the Types of Cybersecurity? To effectively battle against cyber threats, you need to understand the different types of cybersecurity. There are basically 7 broad categories, which are: Network Security Of the types of cybersecurity, this is the first line of defense. Network security involves securing the channels of communication between computers in an organization. Since most attacks happen over the internet, it makes the most sense to secure that angle first. First, we have the basic methods of network security, which are encryption, implementing firewalls, and intrusion detection systems. Second, there are access control solutions like identity access management (IAM) and data loss prevention (DLP). Additionally, there are more advanced network security solutions, for example, NGAV (Next Generation Antivirus), sandboxing, and IPS (Intrusion Prevention System). Application Security Otherwise known as cloud security, this type of cybersecurity involves protecting the applications, devices, and infrastructure of an organization against attacks. To do that, a cloud security strategy must be implemented. Sure, cloud providers give security to an extent, but third-party security solutions will still be necessary to provide all-round application security. Mobile Security Data is stored on several devices, mobile devices included. Most times, mobile security is overlooked, which shouldn’t happen. With the constant increase in the use of mobile devices (tablets, smartphones, etc.) to access corporate data, it is important that this end is secured. Mobile security, among the types of cybersecurity, protects against cybercrimes and secures operating systems from jailbreaking and rooting. One solution is to use a mobile device management solution to grant access to authorized mobile devices only. End-user Education The types of cybersecurity list isn’t complete without the end users education. Organizations should raise proper awareness amongst their staff and other individuals about the importance of cybersecurity. Regular training programs will get the job done. Operational Security This is basically the implementation of policies and procedures to ensure proper security of systems and networks. Under this umbrella, regular assessments of existing cybersecurity systems and upgrading where necessary are covered. Also, regular employee training on best security practices in addition to establishing incident-response plans is included. Data Security As has been noted, data security is different from cybersecurity. Data security includes all methods used to protect the integrity, confidentiality, and accessibility of important information from external threats. Such methods include encryption, access controls, and backup systems to prevent unauthorized access, loss, and compromise. Note: Importance of Data Security Critical Infrastructure Security. This is straight to the point. It is everything you can do to protect the computer system in your organization. This includes all technologies, processes, etc. you use to ensure the systems continue to work properly. Data security vs. Cybersecurity Often times, cybersecurity is mistaken for data security. Although they are used interchangeably, they aren’t the same. Data security includes methods by which data (personal) is protected from loss, compromise, or threats, while cybersecurity guards all the digital networks and systems used to collect, transit, process, and store data. For example, if you run a healthcare facility for HIV/AIDS patients, for records-keeping, you’ll definitely collect and store a ton of sensitive information like patients names, medical status, home address, etc. Now, the methods you employ, e.g., encryption, tokenization, etc., to protect them from external threats are data security. Also, you’ll need to secure the computer and every other hardware used to input and store the data from unauthorized access, hence cybersecurity. In summary, data security is a type of cybersecurity. Conclusion In present times (2024), understanding the different types of cybersecurity is beyond important for proper data protection from ever-evolving threats. By implementing all-round security measures, from network and data security to end-user education, businesses can safeguard their systems, data, and reputation. At Johan Consults, we help you achieve maximum security for your data and assets. Contact us for a free initial consultation.