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Navigating the cybersecurity landscape in fintech: Best practices and emerging threats
Navigating the cybersecurity landscape in fintech: Best practices and emerging threats

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Navigating the cybersecurity landscape in fintech: Best practices and emerging threats

In today’s rapidly evolving fintech landscape, the rise of digital platforms and data-driven approaches has created new and complex cybersecurity challenges and raised the need to protect sensitive financial data from cybersecurity threats. So, how can a fintech company protect itself from cyber threats?

In this blog, we will examine the current cybersecurity challenges facing the fintech industry and provide insights for protecting financial information and transactions.

Emerging threats in fintech

Fintech companies process sensitive information, and cybercriminals are well aware of this. Efforts are made to identify any weaknesses in the system and obtain critical information. Cyber ​​fraud can put a fintech company in a bad position, losing customers and trust. 

What challenges and cyber risks should you look for? Let’s look at 5 examples of data threats and challenges:

  1. Data breach
    This is one of the most common types of data breaches. Fintech companies handle a wealth of sensitive financial data, making them easy targets for cybercriminals. Data breaches can expose personal financial information, which can severely harm individuals and businesses.
  2. Mobile app vulnerabilities
    It can be used as gateways to unauthorized access to users’ accounts. Using it, hackers can gain access to user accounts, view sensitive financial information, and perform unauthorized transactions. 
  3. Third party risk
    Most Fintechs rely on third party applications for a wide range of services including cloud computing, payment processing and customer insight but these third party applications can introduce additional vulnerabilities as they can compromise all fintech infrastructure.
  4. Malware attacks
    It can take many forms and is among the most important digital threats. Its versatility and constant change make it a very serious threat. It can get into systems through a variety of channels, including email attachments, embedded software, APK files, and malicious pop-up ads.
  5. Identity theft
    Many financial institutions use multiple authentication protocols to protect against identity theft. These include biometrics, one-time payments (OTCs), and traditional passwords. However, these verification methods are not the same. Hackers can easily duplicate or circumvent these methods, allowing unauthorized access and significant financial losses.

Best practices in data protection

The first step in ensuring that your fintech application is secure is to conduct a proper threat assessment. A comprehensive threat analysis includes internal and external threats that can compromise your system integrity and data security.

1. Permanent backup of data

Cyber ​​threats are not the only cause of data loss. Human error, system failure, and unexpected events can also lead to data loss. By backing up your data on a regular basis, especially every six months, you can ensure that the most up-to-date and important information is retained, minimizing data loss.

2. Data Encryption

Encryption protects your data, keeping it private and off-limits to third parties. Encryption not only protects your data, it also prevents data breaches.

3. Check for third-party vulnerabilities

While third-party software can improve the performance of your system, it can also expose you to vulnerabilities. Regularly monitoring and analyzing third-party tools can identify and address weaknesses, making your system more robust.

4. Data-driven analysis

Use past data breach and threat intelligence, as well as industry threat reports, to drive your threat analysis. This data can provide insights into new threats.

5. Firewalls

They play a very important role in protecting your data from external threats. They are configured to handle traffic coming in and out of the edge of your network.This can turn out bad traffic and ensure security compliance.

6. Employee training and awareness

Cyber ​​security training and awareness campaigns can be useful in dealing with cyber threats.

7. Benefits of AI and ML 

Artificial intelligence and machine learning can be used to enhance threat detection capabilities. It can analyze patterns and potential security threats to let you know before it’s too late.

8. Regulatory compliance 

It is important for fintechs to monitor and comply with industry regulations and compliance standards. Regulatory frameworks, such as GDPR (General Data Protection Regulation), PCI DSS (Payment Card Industry Data Security Standard) and a few others can guide fintechs to protect their customers’ valuable data.

Conclusion

Cybersecurity plays a crucial role in the long-term growth of fintech. As fintech continues to disrupt the financial industry, it is essential for cybersecurity to lead in innovation, technology, and compliance to mitigate emerging threats. Fintech firms can navigate the evolving landscape and build resilience for the future by adopting best security practices and fostering a strong cybersecurity culture through the adoption of the latest technologies.


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KFintech serves the mission-critical needs of asset managers with clients spanning mutual funds, AIFs (alternative investments), pension, wealth managers and corporates in India and abroad. The company provides SaaS based end-to-end transaction management, channel management, compliance solutions, data analytics and various other digital services to asset managers across segments, as well as outsourcing services for global players.

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