There’s a wide variety of online wallets today. This has sparked a rise in cyber threats like fraudulent transactions and DDoS attacks. Although cyber-attacks on a global scale rarely occur, they can potentially cause systemic risk to the finance industry.
Nevertheless, the significant data breaches experienced in the finance industry were prominent enough to negatively affect key economic structures. These cybersecurity penetrations were able to expose sensitive company data.
Digital security threats affect all mechanisms of the FinTech ecosystem. The most impacted participants are FinTech firms and the consumers that leverage digital wallet services. Tech teams need to understand the severity of these digital security threats that can exploit bugs in source codes to steal user data and protect information better.
To combat this threat, FinTech firms employ different cybersecurity measures; one example could be securing your traffic with a VPN service, which hides your IP address and gives your data a high level of encryption.
This article will reveal everything you need to know about cybersecurity.
Prominent internet threats to FinTech firms
Here are some prominent internet threats to FinTech firms:
Malware
Malware is short for malicious software. It is created by hackers to upset a computer’s workflow or penetrate a system without permission. The primary goal of malware is to illegally record data from a victim.
Malware can be subdivided into adware, ransomware, spyware, and Trojan horse.
Adware
Adware is short for advertisement malware. It is designed to allow unsolicited pop-ups on a user’s screen. The purpose is to make the advertisements seem legit, like the software provider offers, and have the victim click on the ad.
Ransomware
Ransomware is one of the most dangerous malicious programs created by cyber-attackers. If ransomware gets on a system, it works by encrypting the files to prevent access by a user.
When ransomware gets on your system, you’ll see a screen informing you that you’ve been infected. Usually, ransomware hackers leave cryptocurrency addresses for the victim to pay a ransom into before the key to unlock the malware can be released.
In many cases, firms have paid hundreds of thousands of dollars only to have their files wiped after a specific number of days. The WannaCry ransomware still ranks as one of the most damaging ransomware attacks to an organization, leading to billions of dollars in losses.
Trojan horse
While ransomware requests a ransom from you to have your computer freed up, a trojan horse has the potential to steal your finances directly. Trojans are designed to mask themselves as a legitimate program.
When downloaded onto your device and granted permission, it can steal sensitive data. For instance, a trojan horse can mask itself as your digital wallet and get installed on your device. Thinking that the software is legit, you insert your financial details into the program only to send them to the hacker.
The cybercriminal would have unfettered access to your finances when they access your digital wallet, and funds could be siphoned this way.
Cybersecurity solutions for FinTech firms
Here are some cybersecurity measures:
Data encryption
When you leverage data encryption for your FinTech firm, you protect sensitive data from unwanted eyes. One way is by protecting your internet activity with a VPN service that properly encrypts your data.
For instance, if your FinTech company’s Wi-Fi password gets compromised, it could lead to a hacker accessing all of your internet activity. However, if you encrypt that internet traffic with a VPN, the criminal cannot decipher the symbols and numbers on their screen.
What would be needed to unlock the data would be a key which would be inaccessible to the hacker, rendering your data useless to the criminal.
Another way to perform encryption on your data is to leverage different algorithms like 3DES or RSA, which tokenize your information.
Improved authentication systems
The first step to protecting your FinTech startup’s data is to improve passcodes and ensure efficient password practices. One way to do this is by asking employees to use strong passwords that are a mix of upper-and-lower case letters, numbers, and symbols.
They can also leverage passphrases that mean something like ‘ilovetoplaytabletennis’ for easier retention. If some colleagues are having issues remembering their passcodes, you can go into partnership with a password management service.
Great password practices include changing passcodes once every 90 days and never reusing the same password across multiple accounts.
Your security system must also include an authentication method in case a hacker gets access to an employee’s password. You can leverage one-time passwords, limited sessions, or biometric authentication.
Restricted information access
Information access needs to be restricted to specific employees that require that data. If some employees do not work with sensitive information, there’s no need for their accounts to be granted access to view that data.
When an employee gets fired, the IT team needs to lock that account and prevent it from gaining access to the online workplace. There also needs to be a system that monitors all activity related to information databases.
Types of cybercriminals on the internet
Before adversaries like cybercriminals can be countered, they must first be understood.
Here are the types of unauthorized individuals attempting to breach FinTech startup security systems:
Insiders
An insider is an employee or contractor with access to a FinTech startup’s system. This cybercriminal has access to data and then uses that privilege to steal information or funds.
For instance, HSBC bank had an internal fraud case during the start of the Global Financial Recession, where an employee transferred almost €100 million to bank accounts.
Hacktivists
Hacktivists are politically motivated individuals who double as tech-savvy cyber-attackers who penetrate security systems. Usually, they go after security agencies or financial institutions after a controversial political event.
Cybercriminals
Cybercriminals are purely motivated by greed to breach a firm’s security system. That’s the key reason most cybercriminals target sensitive data. When data is stolen, it can get sold on areas like the dark web to entities for financial gain.
Other types of cybercriminals leverage trojan horses to siphon financial data from users.
The increase in the number of digital wallets utilized positively correlates with the cyberattack trend. FinTech firms are some of the most affected organizations by malware, ransomware, adware, and trojan horses.
To protect your FinTech startup, you need to restrict data access to certain accounts, improve authentication systems, and leverage data encryption tools like VPNs. To stop hackers, you need to understand their motivations. Most cyber-attackers are classified as hacktivists, cybercriminals, and insiders.