The Fintech Sector is Under Cyber Attack – Here’s How Companies Are Protecting their Data
Fintech companies – those that offer technology to support the banking and personal finance industry – are increasingly at risk of cyberattack. After healthcare, fintech is the second most frequently attacked industry, according to Alissa Abdullah, senior vice president of cybersecurity technology at Mastercard. Fintech News found that 27% of attacks target banks or healthcare.
The banking sector has always been an attractive target for hackers, but fintech companies that digitize and store consumer data, in addition to financial information, are an even better bet for bad actors. Here’s how hackers are targeting fintech companies – and what your fintech company can do to better protect itself.
Why is fintech under attack?
Fintech companies enable consumers and businesses to transfer money, manage investments, and access lending and personal financial resources digitally, especially through mobile devices. As such, fintech companies are the perfect target for hackers. “FinTech firms are digital natives, born in the cloud. They thrive on agile development, innovation and time-to-market in what is a highly competitive sector numbering in the region of 1,600 companies today,” explains one expert. “Unfortunately, this means security is sometimes side-lined.”
The fintech market is expected to grow to $309.98 billion by 2022 and has already accounted for nearly half of all venture capital investments in 2018. Digital payments and personal finance make up the majority of the fintech market, which is also where hackers are typically focusing their attacks. Fintech companies regularly face threats in the form of:
- Phishing attacks
- Data breaches
- Cloud security
- Application security
The size of the fintech market, plus the fact that these companies handle sensitive customer information, make it a very attractive target to groups like Evilnum. What can a fintech company do to improve cybersecurity?
What can fintechs do to increase protection?
The fact that many fintech companies are relatively unsophisticated in protecting their data is both good and bad news. Bad news, because it means financial and customer information is insecure. Good news, because it means that there are some basic measures a fintech company can implement to prevent future data breaches.
A study by Accenture found that few financial companies have invested in their cybersecurity: “only one-third of companies are deploying technologies such as machine learning or AI, while only 24% said they were using cyber analytics and user behaviour analysis to their advantage. The latter figure had actually decreased from 31% a year previously.”
Any incremental investment in cybersecurity promises to have a big impact in the fintech sector. And luckily, there are some clear areas where it’s possible to reduce a fintech business’s vulnerabilities.
Improve cloud security
The financial services industry uses cloud services at many different points in their business operations. Payment gateways, digital wallets, and mobile apps all utilize the cloud to provide security, speed, and scalability to consumers and businesses. Adding a cloud data loss prevention (DLP) service can dramatically reduce the risk of data exfiltration — the risk of your data ending up somewhere it doesn’t belong. A cloud DLP solution, like Nightfall, specifically discovers, classifies, and protects personally identifiable information (PII) and other unique identifiers, credentials and secrets. Nightfall’s automated solution alerts security teams when content that contains sensitive tokens has been shared, accessed, or viewed in an inappropriate setting – or and modified by an unauthorized user.
Increase sector-wide collaboration
The World Economic Forum has been tackling the issue of cybersecurity in fintech through a number of initiatives. One important obstacle the WEF has identified is the lack of industry-wide collaboration.
“Established financial services providers have a number of frameworks, standards and industry-driven initiatives available to test the security of FinTechs and other third parties. However, the volume of industry initiatives – driven by the pace of technological change and the multiplication of regulations – is now creating ‘noise’. This makes it difficult for FinTechs to direct their resources in a way that allows for security while also facilitating commercial partnerships,” reports the WEF.
It’s important for fintech companies to participate in developing risk assessments and frameworks for improving cybersecurity. Industry groups such as the Center for Internet Security can offer assistance and resources to growing fintech companies. Mastercard works with other financial companies through the Financial Services Information Sharing and Analysis Center (FSISAC). And the World Economic Forum’s FinTech Cybersecurity Consortium continues to provide research findings for this sector.
Educate your team
“FinTech firms may be staffed by bright, tech-savvy employees, but it takes just one loss of concentration to potentially expose the organisation to ransomware, data theft and more,” writes one expert. Hacking groups like Evilnum count on user error to make their attacks successful. Unfortunately, user error is often the best-case scenario. Accenture’s research shows that the “human factor” plays a massive role in the cybersecurity of the banking industry. “Three-fourths of the banking companies we surveyed had experienced people-related incidents such as phishing and social engineering (just behind malware and web-based attacks, the top answers), with an average cost of $118,000 to resolve. Forty percent had experienced a malicious insider event, with an average cost of $116,000.”
A good failsafe is leverage a cloud-native DLP platform like Nightfall to set custom actions to prevent employees from the unauthorized sharing of data. Delete messages that contain API keys and other credentials like credit card numbers, or other sensitive customer information. Nightfall is the industry’s first cloud-native DLP platform that discovers, classifies, and protects data via machine learning. See how Nightfall’s tools can benefit your company by scheduling a demo at the link below.