Do you know there were 2,365 cyberattacks in 2023? Moreover, there was a 73% increase in data breaches in 2023 as compared to 2021, which was an all-time high. Fintech businesses are getting more efficient as they work with mobile transfers, electronic payment systems, end-to-end user experiences, and trading cryptocurrencies. However, this fast growth into the digital world also brings big security risks that need to be carefully looked at. This article will help you understand the importance of cybersecurity in fintech and the challenges faced by fintech companies using cybersecurity.

What Is Cybersecurity In Fintech?

Cybersecurity in fintech refers to the practices and technologies used to protect financial technology systems, services, and data from cyber threats. Given the rapid digitization of financial services and the increasing reliance on online platforms, robust cybersecurity measures are essential to safeguard sensitive information and maintain the integrity of financial operations. To address these needs, companies are increasingly looking to create a cybersecurity fintech app that offers comprehensive protection.

Recent Developments Of Cybersecurity In Fintech

In 2021, the Indian fintech market was worth $50 billion. By 2025, it’s expected to be worth $150 billion. 

The complexity of cybersecurity in BFSI has increased. Customers are more likely to prefer electronic banking. There is a preference among 78% of Americans for mobile banking app.

Importance Of Cybersecurity In Fintech

Smaller regulatory requirements enable fintech companies and startups to provide more adaptable products and services than banks. Additionally, they provide a faster time to market, which is crucial from a business standpoint.

However, fintech cybersecurity is often compromised as companies frequently remove essential features or simplify their products due to quick release cycles. Because they can’t perceive the additional commercial value, fintech organizations frequently just partially protect their solutions, skipping or postponing some security procedures entirely.

Fintech companies might loosen their rules and criteria for non-functional data security. People don’t know enough about cybersecurity.

This often leads to the creation of useful but badly secured things, which, when scaled up and needing proper security or fixing, are likely to cost a lot in security costs. Because of this, working with fintech companies instead of foreign banks might be riskier.

A security breach can occur more often at a fintech company than at a bank that has to follow strict rules, if you look at everything. Hackers are interested in fintech companies because they know that they don’t put as much money into security as banks do. Some mistakes that can lead to problems are storing data without encrypting it. The most frequent security lapses in this industry consist of:

  • Phishing and social engineering assaults can result from identity theft.
  • Money laundering and fraud
  • Data leaks and application security flaws
  • Spoofing
  • Attacks with malware, such as ransomware

Cybersecurity Challenges In Fintech

1. Application-Related Risks

Fintechs rely heavily on their apps to perform a variety of real-time transactions by accessing user profiles and data. Applications are a primary source of attack vectors because weak code can be used to gain access to the network and infrastructure of fintech companies.

2. Complexity Of The System

Potential dangers of cyber vulnerabilities increase with the number of interconnected third-party systems. Different systems created at different times by various coders frequently result in compatibility problems and other issues with cyber security. This makes it harder to find all possible sources of vulnerability.

3. Wide-Scale Cloud Transition

Fintech companies use cloud services to get reliable, scalable performance at a lower price. But security in the cloud needs to be different from security in a business or network. When you use more than one cloud option, you often end up sending more data but having less visibility between these spread-out ecosystems.

4. Involvement Of Third Parties

Fintech companies often leverage third-party services and solutions in addition to their own apps. One of the simplest ways for Black Hats to get inside Fintech organizations unseen is by using third-party access while disguising themselves as authorized users.

5. Noncompliance Issues

Fintechs must comply with all applicable regulations, including GDPR and PSD2, based on the sort of activity they engage in and the license (Electronic Money Institution, Specialized Bank, Payment Institution) that is needed. Failure to comply with these rules may result in fines from the authorities or a significant data breach.

6. Privacy Of Data

One of the biggest obstacles is getting customer agreements for providers to share data. Fintechs can reduce the risk of lawsuits (caused by data leaks or misuse) by combining technological and legal strategies.

7. Data Breaches

A data breach happens when someone who isn’t supposed to have access to private data, like banking information, does and then uses it for fraud. A data breach can have bad effects that last for a long time, such as losing money, losing the trust of customers, and having your image hurt. To lower the chance of data breaches, you need to put in place strong security steps and train your employees.

8. Insider threats

Insider threats are another big problem that fintech companies have to deal with when it comes to safety. An insider danger is a security risk that comes from someone inside a company, like a worker or contractor who is allowed to access private information or systems. There are many ways that an insider can pose a threat, such as by stealing data or selling private information on purpose or by accident (by clicking on a bad link or falling for a phishing trick).

Top 5 Fintech Cybersecurity Companies

1. Appic Softwares

Appic Softwares is one of the best company for cybersecurity solutions and a trusted fintech app development company. They protect banking apps with advanced, custom security measures. Appic Softwares has a deep knowledge of the unique problems fintech companies face. They offer cutting-edge solutions that keep private financial information safe, make sure companies follow industry rules, and lower risks like fraud, data breaches, and threats from insiders.
Appic Softwares offers full security for fintech app development encryption, multi-factor authentication, secure payment systems, and AI-powered threat detection. This helps companies deal with the complicated world of cybersecurity while making sure users have a safe and smooth experience. When it comes to keeping mobile banking apps safe or making sure the cloud is safe, Appic Softwares is the partner that fintech companies trust to stay ahead in a digital world that is changing quickly.

Headquarters: Jaipur and USA

2. IBM Security

Importance Of Cybersecurity In Fintech

IBM Security offers a comprehensive suite of cybersecurity solutions designed to provide enhanced protection and threat management across various sectors, including fintech.

Key Features:

  • Holistic Security View: IBM Security provides integration and correlation of data across multiple security tools, giving businesses a unified view of their security posture.
  • Advanced Technologies: Leveraging AI, machine learning, and analytics, IBM Security’s solutions enhance the ability to detect and prevent both known and emerging cyber risks.

Specialization: Cybersecurity Solutions

Headquarters: Armonk, NY

Founded in 1911, IBM Security combines advanced technologies with a holistic approach to provide robust cybersecurity measures for businesses.

3. Eden Data

Importance Of Cybersecurity In Fintech

Eden Data is a leader in the cybersecurity arena with a steadfast commitment to clients, innovative strategies, and solution-oriented security approaches. Since its founding in 2021, Eden Data has stood out due to its unique methodology and robust client support.

Key Features:

  • Team of Cyber Experts: Eden Data’s team comprises former military cyber professionals and seasoned experts from Big 4 firms, ensuring that your business’s cybersecurity grows in tandem with its expansion.
  • Client-First Approach: At Eden Data, clients are treated as digital family members. The company focuses on protecting client data while clients concentrate on their core business activities.

Specialization: Cybersecurity Consulting Services

Headquarters: Austin, TX

By focusing on security, compliance, and data privacy, Eden Data helps businesses outpace competitors and avoid falling prey to digital threats.

4. CrowdStrike

Cybersecurity In Fintech

CrowdStrike has established itself as a formidable player in the cybersecurity industry, particularly in fintech. Known for its cloud-native protection, CrowdStrike offers tailored solutions to meet the unique demands of the financial sector.

Key Features:

  • Falcon Platform: This flagship product uses artificial intelligence and machine learning to detect and respond to cyber threats in real-time. By employing behavioral analysis and predictive algorithms, Falcon identifies even the most sophisticated threats.
  • Proactive Threat Response: CrowdStrike’s platform provides comprehensive protection against potential data breaches and malicious attacks, ensuring the security of financial transactions and sensitive data.

Specialization: Managed Endpoint Detection and Response (EDR), Extended Detection and Response (XDR)

Headquarters: Austin, TX

Founded in 2011, CrowdStrike leverages advanced technology to protect businesses across various industries, including fintech.

5. Bluefin 

Importance Of Cybersecurity In Fintech

Bluefin Payment Systems is a recognized leader in payment security, providing specialized services to secure transaction technology across different industries, including fintech.

Key Features:

  • Point-to-Point Encryption (P2PE): Bluefin’s PCI-validated P2PE solution ensures the security of payment information by encrypting data at the point of entry. This significantly reduces the risk of data breaches during financial transactions.
  • Tailored Payment Solutions: Bluefin caters to a broad range of customers, offering tailored solutions for large enterprises, retailers, and small and medium-sized businesses, ensuring secure financial exchanges.

Specialization: Cybersecurity, Payment Security, Point-to-Point Encryption Solutions

Headquarters: Atlanta, GA

Founded in 2007, Bluefin Payment Systems focuses on maintaining the confidentiality and integrity of transactional information, providing paramount security for financial transactions.

6. Darktrace

Importance Of Cybersecurity In Fintech

Darktrace is renowned for its innovative approach to cybersecurity, utilizing artificial intelligence to create an adaptive and self-defending network environment.

Key Features:

  • Enterprise Immune System: This groundbreaking AI technology mimics the human immune system, learning the ‘self’ of an organization’s digital environment to identify potential threats. It provides real-time threat detection and an adaptive response to anomalies.
  • Antigena Module: Acting as a digital ‘antibody,’ this module neutralizes cyber threats before they can cause harm, ensuring continuous protection and learning from interactions to improve over time.

Specialization: Artificial Intelligence, Machine Learning, Cybersecurity, Threat Detection, Network Security, Cloud Security, Email Security, Autonomous Response Technology

Headquarters: Cambridge, United Kingdom

Founded in 2013, Darktrace leverages advanced AI to redefine the possibilities of cybersecurity.

The Future Of Cybersecurity In Fintech

Fintech companies need to pay close attention to cybersecurity because the business is evolving fast. AI in security and predictive analytics could help find problems and stop them. When using fintech technology, ethical issues and AI control models need to be thought about. Fintech companies need to be open to new tools and push for progress in cybersecurity. Quantum computing poses a threat to encryption, but progress in cryptography will make it safer to store data. To keep their most important assets safe from hackers, fintech companies need to follow best practices, keep coming up with new ideas, and make long-term plans.

Conclusion

Cybersecurity is a very important problem in fintech. Since financial services are using technology more and more, hackers have more chances to take advantage of weak spots and steal private financial data. But financial institutions and fintech companies can keep themselves and their customers safe from cyber dangers by using best practices and the newest technologies.

Get In Touch today to learn more about how we can help you navigate the complexities of cybersecurity in fintech and achieve your business objectives securely and effectively.