Keeping the finance industry safe and secure: cyber security in finance and fintech
Cybersecurity is essential in any industry, but especially in finance
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In 2023, the global FinTech market reached a valuation of $226.71 billion, or almost ￡175 billion, according to the World Economic Forum. The financial industry’s reliance on digital platforms has grown exponentially in recent years and this trend shows no signs of slowing down.
And while this brings good news in terms of productivity, accessibility and efficiency, finance and FinTech solutions are also a prime target for cybercriminals. IFA Magazine reported that, in 2022, the UK finance industry suffered the second highest number of security breaches with 305,785.
Understanding the data protection risks the finance industry faces is the first step to effectively mitigating them.
The cybersecurity risks to finance and FinTech
Hackers are drawn to the large quantities of valuable data finance businesses store, including PII (Personally Identifiable Information) like bank account details, names, addresses and more. These can be used for fraud, phishing, or selling on the black market.
Because financial institutions handle more sensitive data, they are held to more rigorous regulatory compliance requirements, including PCI DSS. Kroll reports that, last year, finance surpassed healthcare in becoming the most breached industry in the world.
Data stolen from finance organisations can, of course, be held to ransom. In many cases this data is used by hackers for personal gain or sold to the highest bidder. The more sophisticated cyber attackers become, the more vulnerabilities they can exploit.
The costs of such an attack are often more than just financial. Reputational loss and legal action can leave finance and FinTech businesses struggling to stay afloat following a cyber incident.
Protecting finance organisations against cybercrime
With cyber threats on the rise, finance and FinTech businesses must prioritise robust cybersecurity by putting appropriate protective measures in place. Even simple measures like two-factor authentication, regular system updates, and employee awareness training can make a big difference.
Both proactivity and reactivity are important. A proactive approach to cybersecurity can reduce the risk of an incident occurring, while a having a reactionary recovery plan in place can mitigate the impact of a cyber incident should disaster strike.
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Sensitive data encryption
Sensitive customer data – such as banking information and other PII – should be encrypted. This adds an extra layer of security should malicious actors manage to hack into systems, forcing them to work harder to find details they can actually exploit.
Monitoring and audits
Financial sector businesses have a duty to monitor their IT infrastructure and network activities in real-time to detect any vulnerabilities, unusual behaviours or any ongoing or incoming cyberattacks. Regular audits can offer a comprehensive overview of the threat surface, allowing action to be taken before an incident occurs.
Staff training
Cybersecurity is undoubtedly a team effort. Phishing is the most common kind of cybercrime in the UK – with 79% of businesses experiencing a phishing attack in the past 12 months, according to ICO – and these attacks feed on human error. It only takes one misguided individual to bring a system to its knees, so making staff aware of the importance of, and steps involved in, cybersecurity is essential.
Access control
Finance businesses can further bolster their data protection by controlling who can access certain information assets, and from where. Only authorised personnel should be able to access sensitive data, and this requires putting robust access controls in place. These include role-based access controls and multi-factor authentication.
Business continuity
No business wants to experience a cyber incident, but even the most stringent protection measures cannot completely erase the risk of a data breach. The finance sector must have a comprehensive business continuity plan in place in the event of a cyberattack, covering procedures to restore essential services and mitigate damage.
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The fintech industry is indeed thriving, but it's crucial to stay vigilant against cyber threats. Your article sheds light on this important issue, and your insights will undoubtedly help businesses navigate the digital landscape securely.