The Hidden Cybersecurity Risks of Fintech Services

Payment card information and user information are easily accessible to hackers, making online transactions vulnerable to cyber theft. When a financial institution collaborates with a third party, data loss may occur as a result of their inefficient fintech services.

Fremont, CA: In recent years, fintech has significantly improved the products and services of traditional financial services. However, even though many financial institutions have readily adopted fintech services, the aforementioned industry still has some hidden risks. For example, the incorporation of fintech services into existing banking solutions raised serious concerns about data security. Furthermore, due to the rapid growth of digital platforms, the fintech industry and its customers are uniquely vulnerable to various breaches in IT security networks.

Trending challenges in fintech:

Third-party security risks

Internal security is not always sufficient, especially in the case of banks. As a result, many times when banks or other financial institutions use a fintech service from a less-than-trustworthy service provider, they end up losing data, experiencing service failures, and may even suffer a loss of reputation as a result of inefficient data. These types of losses occur as a result of third-party security risks. Banks and financial institutions should consider fintech relationship-related risks in their risk management assessment to minimize third-party risks associated with fintech services.

Data Breaches

We are all aware that data is critical in all industries, regardless of their domain. And, when it comes to banks and other financial institutions, data is of the utmost importance. However, the introduction of inefficient fintech systems in the finance industry exacerbated the problem of data breaches to a large extent.

Payment card information and user information are easily accessible to hackers, making online transactions vulnerable to cyber theft. When a financial institution collaborates with a third party, data loss may occur as a result of their inefficient fintech services.

Malware Attacks

Malware attacks and hacking are the most common types of security issues in the global market. Hackers are now more easily targeting the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Almost all banks and major financial institutions use SWIFT systems to exchange critical financial information.

The recent cyberattack on the SWIFT infrastructure, on the other hand, demonstrated the level of sophistication of the hackers and malware attackers. Banks and financial institutions have vulnerabilities in their processes, which hackers exploit in order to launch malware attacks.