Fintech advancements must be accompanied by advances in response measures that are needed to address security and compliance issues.
FREMONT, CA: Financial technology has experienced massive growth in the last few years. Although it offers disruptive and innovative financial technology services to the people, banks deploying fintech need to address the new risk factors that are linked with it. Banks that deploy fintech solutions face cyber risk from integration issues, comprising compatibility and legacy technologies. Read to know more.
The gap between regulation and technological innovation is severe in fintech, as the regulatory landscape has to strive hard and cope with the speed at which technology innovation is taking place. However, there are certain steps that banks can take in order to address the rising gap between innovation and regulation. Regulators and enterprises need a proactive, ongoing dialog that can provide regulators with an enhanced understanding of the technology. This will provide insights to regulators for devising new regulations that are crafted in a way that does not impact the fintech innovation ecosystem. Such a conversation will also provide value to banking service providers in terms of understanding major issues, including the need for consumer protection as well as cybersecurity.
With several banks offering fintech solutions, it is statistically inevitable that none of them will fall short on compliance and security. One-step that would aid banks in this context is to step away from the unwanted rush to hit the market. Banks can take extra time for extensive testing before the release of any solution. Apart from this, the combination of big data and machine learning has enormous promise when it comes to fintech in banking. This interplay will offer some powerful techniques to ensure that cybersecurity doesn’t get compromised in the coming years.
Enhanced access to financial services is clearly a good approach. It is a key goal that has motivated financial institutions as well as governments to advance their financial inclusion. For true success in terms of fintech advancements, it is also important to address the cybersecurity challenges that will accompany such advancements.