The growing importance of cybersecurity compliance in the fintech industry in 2023
Cyber security had become prominent in the market, especially when the typical business turned upside down in the past two years. In the era of the new normal, it was important for organizations from various industries to start strategizing a robust cybersecurity framework and assessment process to remain secure. Correspondingly, the financial industry experienced increasingly significant threats of information theft, as the sector largely deals with sensitive information about companies and individuals. The increasing complexity and technical dependencies of the fintech ecosystem have made data more vulnerable to security breaches.
The increasing cyber attacks on fintech organizations
According to a 2019 report, privacy, security, and compliance due to outdated web applications, APIs, and subdomains became worrisome issues for nearly 100 percent of fintech companies. In 2020, the Indian fintech sector witnessed over 60 percent of phishing activities surpassing the healthcare sector. That’s because attackers often target fintech firms based on their desire for financial gain. Cybercrime in the fintech industry not only results in financial fraud, but also damage & destruction of personal & financial data, embezzlement, reduced employee productivity, etc.
As the financial impact is huge on fintech startups, it becomes almost impossible for them to recover from the severe consequences of financial cyber-attacks due to the lack of security technology and controls. The inability to revive the huge amount of lost resources to restore the hacked data and systems leaves the sector vulnerable to cyber attacks. Data breaches can actually make fintech firms liable to pay damages (Section 43A of the Indian IT Act 2000) for not being able to protect sensitive data. Such situations underline the essence of a proactive cybersecurity approach in the fintech domain, which will help prevent a company’s long-term reputational damage and reduce risk in the digital world.
Potential benefits of implementing robust fintech cybersecurity
Today, leading SaaS platforms have developed effective ways to solve massive cybersecurity problems. They strive to protect customer data and rebuild customer trust in SMEs and startups by providing them with easy access to global data compliance without hassles and delays. Here are further details on how these companies’ one-stop solutions can help build a robust cyber security framework.
Compliance
Realizing the importance of compliance, leading SaaS companies are automating compliance with data security standards for SOC2, ISO 27001, PCI-DSS, etc. They strive to protect intellectual property through systematic risk management methods. Such a comprehensive cybersecurity foundation supports the identification of theft attempts, malware & sophisticated threats, prevent fines, penalties and social engineering attacks, and protect confidential data.
Improved customer confidence
A robust cyber security framework greatly contributes to the financial inclusion and growth of SMEs and startups. It enables a privacy-first approach, with enormous social & economic benefits and increased customer trust. But establishing customer trust starts with incorporating robust information security solutions. With the aforementioned compliance in place, customers can remain assured of no more instances of breaches, identity theft, ransomware attacks, etc. This way, customers trust the platform to protect their sensitive data.
Increased productivity
When the fintech industry implements strong security standards (such as improved firewalls, virus scanning, automated backups, etc.), employees experience high levels of productivity. When security solutions are clubbed with technological innovations, employees can work with lower stress levels and maintain peace of mind, as they do not need to spend excess time on these tasks.
Last word
Cybersecurity threats will surely follow the fintech space, but it is important to constantly be aware and monitor these threats to succeed in the growing market. A robust cyber security foundation can be exceptional in uplifting the overall cyber security state of India by safeguarding data and preventing financial fraud in the fintech sector.
Disclaimer
The views above are the author’s own.
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