Why Cyber Security For FinTechs Is More Essential Than Ever
A FinTech (financial technology) is an innovative technology that aims to improve financial services end-to-end, or the company that invents that technology. They can be developed to answer various needs like an improved customer experience, further efficiency or a more solid management process.
Yet they all have one thing in common: utilizing the latest technology available around. Special software, algorithms, chatbots, automated operations, apps, monitoring & reporting systems and many more… According to this, it is no surprise to come across AI and deep learning within FinTechs. Big data analyses, machine learning or digital identities are also what they are built upon.
Since the world has gone through a rapid change with COVID-19, FinTechs have gained further importance day by day. The reason why is: the world needed fresh and digital solutions to keep up with the times. Those new technologies were much in demand and everyone got introduced to modern methods they’ve never encountered before. For example, the World Bank claims that for the first half of 2020, FinTechs reported growth of around %13.
Innovation Demands Caution
Keeping the fact that the whole world is meeting with solutions they’ve never seen before in mind, caution is necessary more than ever. Because an enormous amount of inexperienced users are connecting with new technologies. Thus, malicious hackers are thrilled to exploit them more than ever. FinTechs often operate on private information and sensitive data, so unpleasant scenarios are prone to happen quite frequently.
As an example, this article underlines that ransomware attacks are happening more often than any other time before. Moreover, their impacts are simply devastating. The same article states that a single successful attack forced Travelex, a foreign exchange company to pay a 6M Dollar ransom.
Malware attacks, ransomware attacks, data breaches or spear phishing are the main arsenal of malicious hackers to leak into network securities. They are skilful enough to manipulate the security vulnerabilities, and the sensitive information of financial institutions are prone to be exploited. Without a doubt, the financial technology of today increased the number of connected devices. So, hackers can reach out to credit cards even from smart watches.
The Danger is Recognised: GDPR
The correlation between the rise of FinTechs and vulnerabilities is swiftly noticed by the authorities. Whether regional or country level, the need to take a measure was apparent. As an example, the EU follows GDPR (General Data Protection Regulation) and it has strict precautionary measures that include FinTechs. If any company or organisation does not comply with the regulations stated, it will simply be fined by the governments.
This is even more critical for FinTechs because of two reasons. Firstly, as stated above, they are experimenting with new technologies which don’t have a strong cyber security interface. Secondly, since most of them are at the start-up or scale-up level, those fines might be quite costly for them. To form an example, a Lithuanian FinTech company named MisterTango casually received 68.000 Dollars of fine for violating the GDPR. This might be devastating for a start-up that’s trying to grow its business.
To not be bothered by such setbacks, FinTechs have to assure that their cyber security is ready and doesn’t possess any security vulnerability. At the same time, GDPR demands organisations to take action within 72 hours. Therefore, proactive measures are a must. Solutions that allow them to save time are also critical since cyber security means racing against time.
Modern Problems Require Modern Solutions
WEF states that FinTechs require to develop a baseline control and assessment structure. There’ve been numerous solutions to check out whether a cyber security network is solid or not. Among those, penetration tests (pentests) have been frequently used. However, they are evidently not so effective since the breaches are happening non-stop. In line with that, as is known, hackers get more dangerous as time passes. So, fighting fire with fire is what FinTechs can apply for.
From this point on, a question of how arises inevitably and the importance of white hat hackers shines out. They are ethical hackers who have CEH certification or approval from the EC council to operate as one. So, they are the appropriate antidote for malicious hackers. In addition to that, FinTechs can take advantage of their services through some flexible methods. There is a way to benefit from their services in a budget-friendly and time-saving manner, so to speak.
Here, the bug bounty program steps in. It is the optimum solution for FinTechs to solidify their cyber security network. Bug bounty is a program that operates with numerous ethical hackers on a bounty centered business model. A bounty is declared and white hat hackers act on spotting vulnerabilities. Since many hackers work concurrently, FinTechs can save a great deal of time. Moreover, they can determine the amount of bounty they can offer in advance, therefore a budget-friendly solution is attained.
From this perspective, bug bounty answers what FinTechs need: A budget-friendly, contemporary solution with an opportunity to take quick action. Not only that, since ethical hackers are accustomed to new technologies, they are naturally prone to operate better as compared to traditional pentests.
Conclusion
FinTechs are extremely valuable for introducing new technologies to the finance industry. However, new technologies mean more vulnerabilities for cyber security networks. Data breaches, leaks or digital thefts are on the rise. Eventually, cyber security for FinTechs can’t be overlooked.
In line with that, FinTechs should be as cautious as possible and be compatible with GDPR and prevent any leakages. Because they can be dreadful for them in any case. A modern solution that allows rapid action in a budget-friendly way is the prescription for FinTechs. Luckily, bug bounty programs constitute a solid answer for them to prevent horrifying scenarios.
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