Why cybersecurity is critical for fintech companies

1. Why cybersecurity is critical for fintech companies? Cybersecurity is usually stereotyped to be a need for big corporations and businesses that carry sensitive information. However, we have also seen a recent surge in attacks on fintech companies. With this, the lesser-known fact that financial institutions have always been the number one target for hackers came to light. But why is this? With more and more digitization of financial services, financial institutions are trying aggressively to reach the masses for financial inclusion. Fintech companies are also trying to make their product simple so that they would have wider adoption. With the high penetration of smartphones and the internet, fintech services are at the doorstep of all individuals. At the same time, hackers see this opportunity as a goldmine to exploit financial applications. As per a report by Boston Consulting Group, financial institutions are 300 times more likely than other companies to be targeted by a cyberattack. Here is why cybersecurity is critical for fintech companies? Hacking of Payment Systems Cybercriminals use the vulnerabilities in payment systems and platforms to steal money or information. At the moment, card processing is the most vulnerable part of financial systems. Moreover, the ease of payment via digital channels like mobile phones and the internet has made it a soft target for hackers. Moreover, some financial institutions are also vulnerable to hacks via mobile apps. With increased dependence on third-party apps for payment and transaction services, it is critical for financial institutions to ensure the security of their apps. Before each transaction, cybercriminals can try to overwrite the data stored in the system by sending incorrect commands. In this scenario, the hacker can access the system and make changes to the data, like the customer’s name and address. This scenario can be avoided by using

2. two-factor authentication, which requires an additional factor to log in. If the hacker still manages to make changes, the financial institution can detect it by checking the data and then taking appropriate actions. Fraudulent Alerts and Notifications Fraudulent alerts are notifications that are generated by existing systems to warn of a potential fraud or an operation in violation of the rules. This can include alerts that the bank or credit card system is generating when the transaction amounts are different than the ones the customer has made. This false alarm can be avoided by verifying the amount in the system with the customers. Similarly, notifications sent by financial institutions are also prone to fraud. For example, a bank may send an alert to the customer regarding an abnormal transaction in their account. The fraud may be done by the customer or someone else. However, the same transaction can be viewed as normal from the customer’s point of view. Hence, the customer needs to be careful with notifications received from the bank. Account takeover and Account takeover attempts With the increased use of the internet, it has become a medium for targeting customers’ accounts. The most common way is to get hold of the customer’s username and password for an account. As the internet has become a medium for communication, hackers can also target the social media accounts of customers and get their usernames and passwords. Once the user has logged into the account, the hacker can make changes to the account or transfer the money to another account. A common way to get hold of customers’ credentials is by phishing. A common method to lure customers is by sending emails that look like official notices from the banks. These emails can have links that direct the customers to log in to their accounts. The best way to protect the accounts is by making it harder to access the account credentials. A good way to do this is by using two-factor authentication.

3. Data Loss Excessive data loss is one of the most dangerous types of cyberattacks. This can range from a human error to external attacks. A human error can be, for example, a loan officer misplacing critical documents such as loan agreements. A more serious example is when a government entity loses data due to an external attack. An external attack can be from a third party, such as a hacker or a nation-state. The best way to protect data is by having backups of data. Moreover, secure data transmission is another way to protect data. For example, when transferring data between systems, it can be encrypted. Similarly, data should not be stored on a single server, as it increases the risk of data loss. Summary Cybersecurity is an essential part of every business. It helps to protect data, prevent unauthorized access to information, and prevent unauthorized access to hardware that could affect business operations. Fintech companies should take steps to keep their systems protected. The need of the hour is reducing security complexity with more expertise investment. A managed security service provider like Vinca Cyber becomes critical as they offer best-in-class large enterprise security posture at a minimal cost without affecting core business complexity. Are you ready to up the game of security with industry-leading security service provider Vinca Cyber. Contact us at: info@vincacyber.com