The majority of banks now use fintech applications to access the real-time financial information of their customers. However, if a software application does not have foolproof security modules and efficient codes, it automatically becomes prone to cybercrimes
Fremont, CA: Business across all sectors has been heavily influenced by technology in recent years. Disruptive technologies like Artificial Intelligence, Machine Learning, Big Data Analytics, and Cloud Computing have become mandatory for companies that want to stay ahead of the competition. The fintech industry is no different, with fintech services undergoing a remarkable transformation in terms of market value. Reports suggest that the fintech industry will touch nearly USD 4.8 trillion by the end of 2020. While many financial institutions have readily adopted fintech services, there are still several hidden challenges. For example, the integration of fintech services in existing banking solutions has raised several concerns for data security.
Here are some common challenges prevailing in the fintech industry that may have the potential devor the industry in the near future.
Over the last few years, online hacking and malware attacks have become prominent amongst banks. While most banks use SWIFT systems to exchange vital information more securely, the recent cyberattack on one of the SWIFT infrastructures has given a clear picture of hackers' sophistication. Banks and financial institutions have specific vulnerabilities in their processes, and hackers take advantage of these to launch malware attacks.
Application Security Risks
The majority of banks now use fintech applications to access the real-time financial information of their customers. However, if a software application does not have foolproof security modules and efficient codes, it automatically becomes prone to cybercrimes. Attackers often leverage the weak security of the apps to steal customers' data. Hence, while selecting a fintech software solution, it is necessary to ensure that it has all the vital security features.
Money Laundering Risk
Money laundering has been a prominent issue for many years now. Fintech-driven banks often use a cryptocurrency that is not formally regulated by any set of standards and global regulations. The frequent use of non-regulated currencies can result in illegal money laundering and even lead to terrorist funding.
New Encryption Technology
Without a doubt, disruptive technologies have enhanced the overall performance of the finance industry. However, these robust systems also give rise to several significant problems in the industry. For instance, blockchain technology, reckoned as a disruptive technology with great potential for the finance industry, has given rise to some serious security issues. Like any other platform, blockchain can be hacked into by attackers, and it is based on the trust between two or more parties.