Hackers and phishing, oh my! To ease Fintech’s security concerns

As technology becomes more prominent in business operations and procedures, data has emerged as perhaps one of the company’s greatest assets. With the increasing importance of data, protecting information from hackers and breaches that can reap devastating effects is the most important thing for many organizations. As such, it is critical to ensure best-in-class security protocols.

In fact, according to a recent report from Flashpoint, there were around 1,980 breaches in the first half of 2022. Although that was down about 15% from the first half of 2021, experts still expect the number of breaches this year to match or exceed 2021 .

Fortunately, many financial technology companies are acutely aware of today’s primary security concerns and offer outstanding solutions and educational measures to ensure that their customers’ information is protected.

Today’s biggest security concerns

With more companies investing in technology, many business leaders share growing concerns about two security aspects in particular, cloud security and cyber attacks.

Cloud security, a set of procedures and technology developed to address external and internal threats to the cloud and overall business security, is important to companies that incorporate cloud-based tools and services as part of their technology stack and infrastructure.

A recent Forrester study found that nearly 50% of companies believe that cloud security translation will lead to increased vulnerability and delayed breach response. Furthermore, despite the prevalence of the cloud, 75% of respondents consider creating secure cloud environments challenging. Only 39% of respondents have a clear and periodically updated cloud security strategy, with 56% lacking a comprehensive approach.

Since cloud software as we know it today has only gained popularity in the past two decades, there is still much to learn and evolve, leading many consumers to become weary of security measures surrounding the technology.

In addition to cloud security, cyberattacks—including phishing, ransomware, malware, and more—have become a bigger concern for individuals implementing new technology stacks, and for good reason. Some of the most serious threats to tech security in recent years include ransomware attacks, the growth of contactless payments, mobile malware attacks and even data breaches of major financial apps.

In fact, according to the latest Banking Priorities Survey, cyber-attacks are considered one of the biggest threats in 2022. The survey also showed that 24% of financial professionals cited data theft as their security priority, followed by compromised devices (21%), synthetic identity fraud (17%), endpoint security (10%) and denial of service (7%).

How Fintech companies are fighting the security battle

In the face of these security threats, many fintech companies are equipping themselves and their customers with the tools needed to protect them and their customers’ data.

While cloud security and cyber-attacks are two valid areas of concern, many fintech companies address these concerns in four ways: identity verification, screening approaches, awareness campaigns, and consistently providing good service.

Identity verification is one area that has excelled in countering the problem. Including advances such as multi-factor authentication (MFA), one-time authentication and email authentication, identity verification is a powerful tool. Microsoft estimates that MFA alone can prevent at least 99.9% of attacks, and Okta noted in their 2022 Business at Work report that one-time authentications are a consistently stable security method with tools like Google Authenticator still quite popular and email verification on the rise – in a stretch. to 12% of customers from 7% in 2020.

Another way fintech companies are addressing these concerns is through screening approaches. Screening approaches continue to evolve to support end-to-end visibility of potential red flags and to combat financial crime. While compliance is standard, many companies implement specific screenings in recruitment that check candidates for involvement in specific issues such as money laundering and terrorist financing. These specific views ensure that new hires are relevant and secure.

In addition, fintech companies are working to persuade users by raising awareness of security measures. While tools like MFA and improved screening approaches are a good start, technology cannot work alone. It is important that people, whether in the fintech companies themselves or in the user communities, are aware of and cautious about cyber-attacks along with any technological approach.

Finally, the client’s fears are allayed by taking perhaps the simplest approach: delivering consistently good service. With so many security risks at stake, fintech organizations must work hard to deliver a trusted proposition and brand. Consistently good service helps build brand loyalty and demonstrates to users that the measures in place are working. Additionally, while the security-first mindset is critical to building a solid product, it also encourages CTOs and their teams to recognize that there will likely be breaches. So it is important to create secure platforms, and to have teams in place to test and support potential breaches and initiate actions if breaches occur.

The future of security in Fintech

Fintech organizations, and CTOs in particular, have a huge responsibility to build products with top security protocols built into their solutions and organize teams that are reliable and ready to act. But as fintech companies ramp up their security solutions, it’s clear that these teams are eager and prepared to overcome the security concerns of consumers while ensuring that solutions fit customer needs and expectations.