Cybersecurity for FinTech companies: importance and implications

Cybersecurity has become a very used word for companies all over the world, and there is a simple reason for that: your data is your company.  As technologies keep growing, they are proven to help and to assist companies to develop new kinds of processes. Most companies are getting “hungrier” for data, and their risks associated are getting much higher. 

And if we said that your data is your company, there is one specific sector who needs to be very alert about cyber attacks: FinTech. And that’s not surprising, given the amount of customers financial companies have nowadays. 

There is a lot of sensitive information involved, as Financial companies constantly process sensitive data from their customers in order to provide services. For that reason, protecting and securing them must always be a priority.  In this sense, there is one word that refers to securing and protecting companies and their data: Cybersecurity.

Furthermore, FinTech companies are implementing new kinds of digital solutions, as they are becoming bigger (for example, AI is crucial for FinTech companies for a lot of reasons, like fraud prevention, and it has some implications from a data protection scope). However, new kinds of attacks are being developed as well, and not only that: they are becoming more sophisticated over time. 

As Robert S. Mueller said, “there are two kinds of companies: those that have been hacked and those that will be hacked”. The reason for that is how valuable is data nowadays, but not only for companies, they are also really valuable for criminals. They evolve to find all kinds of vulnerabilities, and companies need to be very aware of this, especially FinTech ones,  so they can detect new threats and prevent them, implementing security measures.

Cybersecurity risks for FinTech Companies

As we said before, FinTech companies need to be very aware about how important Cybersecurity is for them. They may face really challenging risks (data leaks and breaches, identity theft, malware attacks…) as they process sensitive kinds of data from their customers. Cryptocurrency transfers and new forms of payment are only a few innovations coming from FinTech companies, and if they are evolving, their risks are evolving too. 

In this sense, FinTech companies not only need to comply with Data Protection regulations (for example, with GDPR), they need to comply with frameworks like PCI DSS, which requires them to implement a system which is able to detect breaches. 

With all of this being said, they also need to protect their customers from cyber attacks, which can result not only in financial, but in reputational costs. Cybersecurity has become a crucial component for FinTech companies, as trust is fundamental for them. 

Customers need to be able to trust in FinTech companies, as they are giving them really important data. They care about privacy, and they expect FinTech companies to protect their data and to invest in developing a secure environment, where they can be safe about how their personal information is being processed. Companies that suffer a data breach end up losing a big amount of customers, so they need to implement strong  and secure practices that make customers feel safe and protected. In conclusion, the risks for FinTech Companies in terms of Cybersecurity are very wide: from losing customer trust, to legal implications (for example, GDPR), to misuse of customers data.

Developing a Cybersecurity and privacy culture

If there is something that most companies have learned from risk assessments in general is that zero risk does not exist. Companies need to understand this and to implement security measures directly focused on cyber attacks, which can help to prevent them and to avoid all kinds of risks (data breaches, for example).  

A very strong way of avoiding risks is to invest in highly qualified professionals. They can work on detecting risks and implementing measures to minimize them, leading to a safer environment. It is true that not every company can afford to do so, as there are a lot of small companies and startups, especially in the FinTech sector. 

That’s why investing in Cybersecurity professionals is not enough, your employees are a big part of your company. This is where human risk takes place. They need to be aware about how important it is to develop safe practices in their daily work, as they are a key asset to developing a secure company.

In the words of the CCN-ERT (Information Security Incident Response Capability of the National Cryptologic Centre), in “Basic principles and recommendations in Cybersecurity: awareness, common sense and good practices are the best defences.”

FinTech companies (and companies in general) also need to invest in training their employees in the importance of learning about the threats they can face and their associated potential damages to their company, so they can understand the risks associated with their responsibilities, and so they can implement secure practices. For these reasons, understanding the importance of developing safe strategies, and implementing a Cybersecurity culture must be a global effort in FinTech companies. Ensuring this is investing in everyone’s security.