Cybersecurity is of critical importance in the fintech industry and it is quickly becoming more profitable than the illegal drug trade. Banks, financial institutions, payment processors have always been prime targets for cyber criminals because they handle sensitive financial data and facilitate online transactions.

In 2022, society and businesses were faced with the problem that data leakage is not an ephemeral concept, but specific addresses, phone numbers and other confidential information about specific people. Cyber attacks resulted in lost business, decreased revenue, and ultimately, the failures of the companies. 

Fast facts:

• The yearly global cost of cybercrime is estimated to exceed $20 trillion by 2026
• 2,244 cyberattacks are happening every single day
• On average, only 5% of companies’ folders are properly protected
• Most companies take nearly 6 months to detect a data breach, even major ones.

Industry of finance and trading is heavily relies on trust and reputation. Therefore, the issue of cybersecurity is very relevant here and will remain so at all times.

Biggest challenges

Since COVID-19 and the increase in staff working from home, the FBI have reported an increase of 300% in reported cybercrimes. 4 million files are stolen every day – that’s 44 every single second! Among the main risks of FinTech companies in 2023 are: 

Data breaches. Banks and financial establishments hold sensitive financial information about their clients, such as credit card numbers, bank account information, and personal identification information. If this information falls into the wrong hands, it can lead to identity theft, financial fraud, and other serious consequences.

Phishing and social engineering attacks. Fintech providers are often targeted by cybercriminals who use phishing emails and other social engineering tactics to trick employees into giving away sensitive information or granting access to systems and data.

Third-party risks. Many businesses rely on third-party vendors and partners to provide services such as payment processing, data storage, and customer support. However, these vendors may not have the same level of cybersecurity measures in place, leaving financial institutions vulnerable to attacks through these third-party connections.

Emerging threats. As technology continues to evolve, new threats to cybersecurity are emerging. Financial firms must stay up-to-date with the latest security trends and take proactive steps to protect against these threats.

Over the last few years, many banks and financial providers have faced large thefts of money and data breaches. Here are only several examples:

• In February 2016, hackers successfully stole $81 million from Bangladesh’s central bank.
• In October 2018, Paytm, India’s largest mobile payment and financial services company, reported that an attacker had gained unauthorized access to its database and stole some personal data of its customers.
• In 2021, the online trading platform Robinhood faced a security breach in which a cybercriminals gained access to the personal details of 7 million users.
• In 2022, one of the largest financial providers in the United States, Flagstar Bank, suffered a massive data breach, leaking the Social Security numbers of almost 1.5 million customers. Threat actors were able to obtain Social Security numbers (SSN), banking and personal information (names, addresses, birthdays).

How to minimize cybersecurity risks – Trends and Insights for 2023

The financial sector is experiencing rapid transformation due to technological advancements, which are revolutionizing the way individuals handle their finances. It is important to be aware of current solutions, trends and their impact on the industry as we move forward into the future. Here are the 6 most important areas of cybersecurity development to keep an eye on:

Increased spread of blockchain. Blockchain technology is already being used in the FinTech and it has the potential to enhance cybersecurity by creating a more secure and transparent system for data management and transactions.

AI is getting real. Artificial Intelligence can process large amounts of data in real-time to detect patterns and anomalies that may indicate a cyber attack. This can help to identify threats before they cause damage. AI can also be used to analyze user behavior and identify suspicious activity that may indicate a potential attack. And moreover, Artificial Intelligence can be applied to automate responses to cyber attacks to reduce reaction times and minimize the impact of an attack.

Growth in the use of biometrics. Biometric data such as facial recognition or fingerprint scanning is being used more and more actively to enhance security measures. It is unique to each individual and cannot be easily duplicated or stolen.

Heightened focus on supply chain security. Banks and financial providers are increasingly reliant on third-party vendors and contractors, which can create additional security risks. We are absolutely convinced that fintech companies will invest more resources in ensuring the security at every stop along the chain, for example, in supplier evaluation and audit.

Cloud Security. More and more companies are increasingly moving their operations to the cloud. As a result, there will be a greater emphasis on cloud security measures such as data encryption, access control, and monitoring to prevent unauthorized access to sensitive data. 

Prevention of Human Factor. Human errors are significant causes of cybersecurity incidents. Fintech companies will invest in employee training to make sure their employees are aware of the latest cybersecurity threats and the best practices to prevent them.

How Lansoft can help you?

As a leading software development company, Lansoft has many successful cybersecurity projects in the portfolio.

We carefully analyze the needs of your business case and build a secure, reliable and high quality cyber service with all the safety standards or offer to integrate new tools to your existing software. Contact our experts to discuss your project and see what we can offer to power up your company.