The Importance of Cyber Security in Financial Technology
Financial technology (fintech) has become a recent phenomenon. With the rise in technology and need for convenience, these handy applications and softwares have been revolutionising both business and personal banking. Fintech is nothing new, but what has been detected is the rise in cyber attacks on fintech companies in recent years. Although they have been around since the late 2000s, cyberattacks on the fintech industry have only been spotted to be on the rise since 2017.
There are now more than 12,000 fintech startups worldwide (source) meaning that the hackers targeting businesses for financial reasons now have even bigger targets to go after. Currently, 76 percent of cyber attacks are financially motivated (source), meaning that there is a 76 percent chance of a fintech company being in danger than most sectors, knowing the amount of data and financial information being held. However, not meaning that other industries are safe from financial attack.
What is fintech?
Fintech is designed to help finance in everyday life. Since 2008 it can now handle payments, investment, asset management, insurance and beyond. Whilst fintech was created mainly for the purpose of helping companies manage their finances, it was widely opened for the public to use and help manage their finances online.
Fintech and cyber security
Because of the sheer amount of people that use financial technologies nowadays, the amount of people at risk of data breaches of sensitive information is a high risk. This is why it is essential to make sure that fintech companies keep their security up. For their staff and customers’ safety, and their overall business wellbeing. Safety of customers and staff are at the forefront of cyber security concerns, and what is a grave risk of being affected in the aftermath of a data breach.
The two primary ways in which fintech companies are at risk from cyberattacks
Denial-of-service attacks have been rising since 2017, when big businesses such as Lloyds, Halifax and Bank of Scotland became the targets of hackers. For several days, these three banks became victims of a denial-of-service attack, flooding their services with artificial traffic which brought to a halt all real traffic from thousands of users. Although no data was taken from any customers, there was access to sensitive information due to the security flaws on the online banking portals.
Fintech companies are at large risk of phishing scams due to the amount of people using fintech services. Most of the population now has online banking, making anyone a target if the right measures are not taken. Phishing consists of hackers posing as trustworthy bodies, such as a well trusted fintech company and extracting sensitive information from users.
Although the financial sector has been on the rise for cyber attacks and increased targeting by hackers, financially motivated hacking is popular amongst the medical, government and as well as the financial sector. Ensuring that sensitive data is always protected should be at the forefront of customer safety, which can be done through ensuring all unused data is securely disposed of and destroyed.