The cloud has become an integral part of fintech. It has enabled companies to transform the way data is used and stored, allowing the banking and finance sector to become more flexible and agile. However, as the cloud stores more information, it becomes a bigger target for hackers and those committing cyberattacks. There was a 238% surge in financially motivated cyber attacks during the pandemic, including malware attacks, identity theft, and application infringements. As hackers become more proficient, fintechs must improve their cloud infrastructure to protect their data.
As Head of Sales at Hyve Managed Hosting, Neville Louzado boasts a demonstrated history of working in the Information Technology Services industry. Skilled in Sales, Managed Public and Private Clouds, VMware, Data Centers, and Virtualisation, Louzado is a strong sales professional who graduated from Staffordshire University.
Louzado has shared what he believes fintechs should do when their cloud infrastructure is under threat:
Digital transformation has become a necessity across all industries. Among them is the FinTech sector which has embraced cloud technology as a way to innovate and adapt to the ever-changing digital environment. Cloud computing has become a key part of the FinTech backbone. It has completely transformed the way data is used and stored, allowing the banking and finance sector to become more flexible and agile.
According to PwC’s report, Financial Technology 2020 and Beyond, fintech companies are rapidly adopting cloud computing. However, the report also indicates some of the challenges companies need to be aware of with regards to their cloud infrastructure, with cybersecurity being one of the top risks. Even though FinTech uses cloud technology to accelerate the process of innovation, driving companies towards efficiency, they need to consider the potential risks and vulnerabilities that could arise when migrating to the cloud. As more services go online, data security is proving to be a major challenge.
Top cybersecurity threats on the rise
With a new cloud infrastructure comes new risks, in particular, cybersecurity risks, which should be a top concern for any organisation. In order to mitigate these, there needs to be a certain level of awareness of cloud security challenges and threats for companies to make the right decisions regarding cloud adoption strategies. Some of the most serious and on the rise security threats companies could encounter when adopting a cloud computing architecture are:
- Malware attacks
Numerous well-known FinTech companies such as American Express or PayPal have really suffered the consequences of these disastrous attacks which seem to be getting more sophisticated with time. Hackers take advantage of vulnerabilities by launching malware attacks on users. Ransomware attacks seem to be growing in relevance and in number, being a top threat in the FinTech industry.
- Cloud security risks
Most financial services such as online banking services, digital wallets or payment gateways, have adopted cloud-based platforms. As these platforms store sensitive information, they are a prime target for cyber attackers. With data protection and privacy being the main risks, choosing a reliable hosting provider will be key to safeguarding information.
- Application infringements
With mobile banking being widely adopted and clients saving their financial information on smartphones and other digital devices, FinTech applications have become fundamental to customers. These applications store encoded sensitive data and consequently, present a lot of privacy risks which makes them a key target for hackers.
- Identity theft
FinTech organisations struggle to manage the digital identities of customers. Biometrics, one-time passwords or code-generating apps are some of the authentication methods to authorise services. However, these might not be secure enough which can lead to hackers infiltrating themselves and replicating the identity of the users.
How FinTechs can reduce risk
Building a cyber-risk free ecosystem is one of the biggest challenges for FinTech companies. With the sector constantly accumulating and managing large amounts of sensitive data from customers and enterprises, this information is likely to be exposed to security breaches as organisations adopt cloud architectures. These cybersecurity threats can have a major impact on both companies and their customers. Organisations not only have to avoid daily threats to protect their customer’s privacy and the company’s reputation but also continuously recover breached data, which results in a huge financial cost. In order for the FinTech industry to become cyber resilient to protect themselves, and more importantly, their clients, companies should follow these steps:
- Conduct regular penetration tests to identify possible vulnerabilities or threats
- Determine risk tolerance levels and security target state
- Improve the protection against ransomware and web-based attacks
- Introduce or increase the deployment of technologies such as machine learning or AI to improve security
- Introduce customers to best practices in security management
- Create a framework to monitor risks and prevent data loss
Achieving cyber resilience
With financial institutions embracing cloud technology, cyberattacks have become ordinary and recurrent events that are now part of their daily activity. For this reason, having a solid response plan to mitigate risks when a cloud infrastructure is under threat is vital. FinTech organisations must build a strong cyber resilience plan that defines the company’s key assets, risks and threats as well as security policies and procedures. It should define a strategy on how to deal with a sudden fallout to reduce risks and remove a potential attack as swiftly as possible. The plan should incorporate the deployment of the most innovative technologies in cybersecurity applications. The more advanced the technology is, the more prepared companies will be to tackle complex and sophisticated attacks.
In a sector where customers entrust companies with their most sensitive information and security and data protection play a key role in winning customer’s confidence, becoming cyber resilient needs to be a priority. The consequences of a cybersecurity attack can be irreversible, resulting in the theft of large amounts of data and significant sums of money. As FinTech organisations continue to evolve and leverage the multiple benefits of cloud computing, cybersecurity needs to be an integral part of the companies’ strategy. With a 238% surge in financially motivated cyber attacks during the pandemic, the FinTech sector needs to build a cyber-resilient future for the financial system and the time to do it is now.