From this article, you’ll discover the biggest cybersecurity challenges fintechs face in 2023 and which companies treat them right. But most importantly, you’ll know what to put on your to-do list when creating a cybersecurity strategy for your company.
Regtech solutions are salvation when you’re in the pressing waves of regulation and cyber attacks. But cybersecurity services are just one puzzle piece, and to assemble a picture-perfect invincibility, you’ll require a strong strategy and the knowledge of what malintent to expect.
What are the top cybersecurity threats fintechs should brace for in 2023?
Identity theft is a prevalent problem in fintech, where cybercriminals use stolen or breached login credentials to impersonate users and access their accounts, stealing both money and private data. API attacks are a commonly used method for identity theft, which affects authentication tokens and other account security measures.
Poor cloud computing: Cloud technologies increasingly support financial services, including online banking, payment gateways, and digital wallets, due to their many advantages. However, the large amount of data flowing through the cloud also makes it a target for cyber attackers. Choosing a trustworthy cloud provider with a proactive security approach is crucial to mitigate this risk.
Data breaches are a nightmare that comes true for financial institutions and companies. Fintech apps contain a massive amount of personal and financial information, making them a prime target for cyber attackers who can sell or use the data for financial fraud. Phishing attacks, malware, and exploiting exposed API endpoints without proper access controls are all methods attackers use to obtain this data.
Malware attacks remain a severe threat to fintech companies, with multiple entry points such as emails, pop-up windows, malicious websites, and third-party software. Integration loopholes also pose a risk, as integrating high-tech apps with legacy systems can introduce potential security holes.
Fuzzing, a testing method that provides erroneous, unexpected, or random data to APIs or applications to identify errors, is now used by cybercriminals to find zero-day vulnerabilities. They use machine learning and artificial intelligence (AI) to automate the fuzzing process and identify weaknesses in APIs. Fintech companies must be aware of these threats and take appropriate measures to prevent them.
Best practices for creating a perfect cybersecurity strategy
The abovementioned threats aside, there are more security risks for companies that establish themselves in the Fintech domain, and these risks grow daily. Developing a comprehensive cybersecurity plan for a fintech company is crucial to protecting sensitive financial data and maintaining customer trust.
Here are some best practices to consider when developing such a plan.
Risk assessment
Conduct a comprehensive risk assessment to identify vulnerabilities, threats, and risks to your organization's cybersecurity. This assessment should include an inventory of all hardware, software, and data assets and an analysis of potential risks and the likelihood of their occurrence.
Employee training
Train all employees on cybersecurity best practices, including password hygiene, data protection, phishing awareness, and the importance of reporting any suspicious activity. Ensure that the people responsible conduct training regularly and that employees understand the risks and consequences of not following best practices.
Enhancing employee and vendor contracts security-wise
The unified vision of cybersecurity in your company should be reflected in every contract. Make sure your company has a security policy, cybersecurity insurance, business contingency strategy, dispute resolution, and exit strategy, whether it's a remote or in-house team that world for you.
Incident response planning
Develop a detailed incident response plan that outlines how your organization will respond to and recover from a cybersecurity incident. This plan should include a list of roles and responsibilities, communication protocols, and a process for reporting incidents.
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Access control
Implement access controls to ensure only authorized individuals can access sensitive data and systems. Adopt practices like strong passwords, multi-factor authentication, and limiting access to information on a need-to-know basis.
Regular updates and patches
Keep all hardware and software up to date with the latest security updates and patches. This will help to reduce the risk of vulnerabilities being exploited by attackers.
Data backup and recovery
Implement a regular data backup and recovery process to ensure that critical data is always available in the event of a cyberattack or other security armageddon.
Continuous monitoring
Set up continuous monitoring to detect potential threats and anomalies in real time. This can include network monitoring, endpoint detection and response (EDR), and threat intelligence.
Top four Fintech companies with exemplary cybersecurity
PayPal has a robust cybersecurity program that includes regular risk assessments, employee training, and incident response planning. They also use advanced encryption technologies and multi-factor authentication to protect sensitive customer data.
Stripe strongly focuses on security, with regular audits, vulnerability testing, and bug bounties to identify and address potential threats. They also use machine learning to detect and prevent fraud.
Square has implemented several cybersecurity best practices, including strong access controls, regular updates and patches, and continuous monitoring. They also have a dedicated security team and use advanced encryption to protect sensitive financial data.
Robinhood offers two-factor authentication, biometric login, and a bug bounty program, among other cyber protection methods.
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Wrapping it up on cybersecurity
Developing a comprehensive cybersecurity plan for a Fintech company requires a multi-faceted approach that includes risk assessment, employee training, incident response planning, access control, regular updates and patches, data backup and recovery, and continuous monitoring. By following these best practices, Fintechs can better protect their assets and maintain customer trust.
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