What is FinTech?
FinTech is the implementation of modern technology in well established financial services that are widely used by the business. The new technology has transformed banking and investments as we know it and even currency itself with the invention of cryptocurrencies. The pace of innovation continues to pick up the pace and will soon fully transform all aspects of financial services.
Are FinTech Companies at Risk?
The simple answer is yes. All new and existing companies face a common issue of severe cybersecurity attacks that can lead to massive data breaches. In 2018 Equifax, a consumer credit reporting agency reported that 143 million accounts had been compromised in a huge data breach that took clients personal details. Many other companies have also been victims of security breaches including Citi Financial, CheckFree Corp, Data Processors International, Card Systems Solutions, Korea Credit Bureau and Heartland Payment Systems to name a few.
Technology Ahead of Compliance
The FinTech industry is storming ahead into unchartered territory that is yet to be properly regulated. New entities and government agencies are struggling to keep up with the everchanging world of FinTech the companies do not fall under the same regulation and guidelines as a standard finance business.
For those who use FinTech security is of utmost importance and is usually a big selling point for most companies to reassure joining customers that all data and personal information is handled correctly.
The issue is that while the majority of companies intend to protect data as best possible the gap between start-ups and financial regulations continues to grow larger. As of yet no official legislation has been created to advise and monitor security allowing start-ups to simply sidestep security is they wish.
Vulnerabilities in FinTech
One main area of vulnerability is the connections between entities. As more FineTech start-ups are created many decide to connect with one another to streamline services. This presents issues as the two platforms would have been created at different times by different people with developers not having access to how the other system works and vice versa.
Due to the difference between an interface and the lack of full knowledge, it is difficult for developers to identify potential weak spots.
Another vulnerability is through human error, for example, opening spam email downloading harmful attachments or providing information to fake websites that redirect. Cyber Attackers continually adapt and change their approach to make it difficult for people to spot so it is vital that Fintech companies roll out best practice to prevent such human error from occurring.
Although FinTech appears to be the future for finance, like all technology it is not completely immune to security breaches and attacks. As FinTech becomes more mainstream and entwined with daily life it is more likely that steps to provide up to date relevant legislation will be made thus creating a safer regulated future.