Cyber Security for FinTech (Financial Technology)

Written By maxwell

On July 25, 2022

Before we explore various security tools and tips for the fintech sector, let me start by describing Fintech (Financial Technology). Financial Technology (Fintech) is used to describe new technology that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers manage their processes, financial operations, and lives by utilizing special software and algorithms that are used on devices such as smartphones.

You may ask, why this is a relevant conversation right now…

You may ask, why this is a relevant conversation right now…

Africa as a continent, is already the largest adopter of mobile money transfer systems globally. We have been able to leapfrog various financial technologies and go directly towards fintech, thus improving the continent’s financial access gap. However, like every fast-developing technology, innovation precedes regulation.

Fintech is a relatively new concept and therefore not regulated as much as the traditional Financial Services sector therefore opening room for bad actors. Fintech companies handle individuals’ money and personal data through services such as digital payments, mobile money transfer, mobile banking, insurance services, cryptocurrencies, etc. This combination of financial services on technology platforms makes it an attractive target for cyber criminals. There is therefore a critical need to place high value on data protection and information security in the sector.

For a Fintech based organization, there are various Cyber Security threats and challenges you need to look out for:

1. Identity theft and fraud

The act of using stolen information of a person’s personal or financial information.

4. Data security

Fintech organizations collect, manage and store huge amounts of data daily. The larger the data sets, the higher the risk for the company. If cyber attackers breach the application and steal user data, companies are held liable by regulators due to breach of data regulations and laws.

2. Malware, DDOS, Ransomware (cyber-attacks)

Cyber-attacks have risen in recent years with a majority through such attacks as Ransomware and DDOS (Denial of service attacks).

5. Compliance and regulation

There are an increasing need to comply with various information and data protection laws pertaining to the financial services sector. Regulators require fintech companies to implement certain procedures with dire consequences if these are not met.

3. Network and application security

Applications are at the heart of most fintech organizations. Cyber attackers can figure out the vulnerabilities of the application to gain access to the entire network.

6. Money laundering

It is no secret that illegal proceeds of criminal activities sometimes do find their way to the financial sector. Cybercriminal scans use fintech companies as conduits for illicit funds.

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