The fintech industry continues to innovate and break the stereotypes of traditional financial services. Therefore, the issue of the need for cybersecurity has never been as acute as it is now, Sergey Kondratenko notes. In addition, fintech firms manage sensitive customer data and financial activities, making them attractive targets for scammers. What are the current trends and problems of cybersecurity in the fintech industry, how to protect customer data in modern conditions and maintain their trust in the digital financial ecosystem?
Sergey Kondratenko is a recognized specialist in a wide range of e-commerce services with experience for many years. Now, Sergey is the owner and leader of a group of companies engaged not only in different segments of e-commerce, but also successfully operating in different jurisdictions, represented on all continents of the world. The main goal is to drive new traffic, create and deliver an online experience that will endear users to the brand, and turn visitors into customers while maximizing overall profitability of the online business.
Overview of the current situation with cybersecurity in the fintech sector – Sergey Kondratenko
The current 2023 is already presenting its own cybersecurity challenges for fintech companies. Cybercrime is growing exponentially and digital transformation is a major security concern for businesses around the world.
Sergey Kondratenko talks about the reason why ransomware has stood the test of time: they exploit the biggest flaw in every human being – the ability to make mistakes. It only takes one accidental click on the wrong link or connection to unsecured Wi-Fi, and the entire system can be attacked in a matter of seconds. EU Cybersecurity Agency Annual Report Enisa Threat Landscape Report showed that ransomware and accessibility attacks ranked first during the reporting period, with phishing (Internet fraud) being the most common initial access vector.
In a different report it says that 55% of financial institutions have been hit by ransomware in the past year, up 62% from the previous year. Financial organizations have received some of the lowest payouts from insurance companies after violations, so now it is really very important to create a good system to counter cyber attacks.
Sergey Kondratenko on modern cyber threats in the fintech sector and ways to overcome them
The development of fintech has changed the way we interact with financial services, providing convenience and accessibility. However, the digital revolution is giving rise to new threats to cybersecurity. Customer personal information, financial records and transaction details are stored by fintech organizations in huge volumes. Therefore, due to their high value, these assets are attractive targets for cybercriminals. Given these trends, according to Sergey Kondratenko it is essential to be aware of cybersecurity risks in order to understand how to make it less vulnerable to planned cyberattacks.
Modern cyber threats and ways to solve problems:
- Problems of cloud computing. Most online financial services, including payment gateways, internet banking, digital wallets, and form filling, are provided through a cloud computing system. It provides advantages such as scalability, speed and availability, the volume of incoming data makes them vulnerable to cyber attacks. Therefore, it is very important to choose a reliable and secure cloud service provider who can customize the cloud according to the needs of the client.
- Malicious attacks. The most common type of cyber attacks are malware. They can infiltrate through various channels, including email, third-party software, suspicious websites, and pop-ups. This is especially dangerous because of the high transmission and propagation speeds that can bring down entire networks.
I draw attention to the fact that in order to protect against cyber attacks on software, it is very important to choose cybersecurity infrastructure providers with regularly updated software that can quickly detect malware, – emphasizes Sergey Kondratenko.
- Third party access. Financial institutions often use third-party services and software for various applications. Since these programs are connected to the main systems of organizations, they serve as entry points for hackers posing as authorized employees or customers of a third party. In this case, being careful when choosing a reliable third-party solution will help overcome cybersecurity issues.
- System complexity and compatibility. Large financial institutions sometimes have several branches and headquarters around the world, each equipped with infrastructure from different vendors and developers. These systems are connected to each other, but they may not be compatible or create complex relationships that will leave gaps in the network. These weaknesses serve as the starting point for cyberattacks.
- Identity theft and authentication. Financial institutions often use methods such as one-time payments, biometrics, passwords and other types of authentication to ensure security and verify identity. These methods have the disadvantage that they can often be copied, which opens up the possibility for hackers to steal significant amounts of money. Financial institutions must apply various verification gateways to prevent intrusion.
- Digital online platform. Most fintech organizations are now using internet platforms. This indicates that the PCs and mobile devices through which users access their accounts are vulnerable to hacking.
Customers have to make many transactions using phones, tablets, computers and other devices. When using them for financial transactions, it is recommended to install anti-virus software with real-time detection and secure browsing,
Sergey Kondratenko explains.
The introduction of artificial intelligence in the cybersecurity of fintech companies
Many companies looking to digitally transform their operations will need to be well protected when it comes to cybersecurity. This means that now more than ever it’s important to build an IT team that knows a reliable way to do it.
One such security measure could be the zero trust model, which has become a popular alternative to password protection. In the latest Verizon Data Breach Report it says that 80% of data breaches are due to bad or reused passwords. In the zero trust model, users are considered as potential subjects of threats and must confirm their right to access data every time,
informs Sergey Kondratenko.
According to study published by Teramind in 2021, organizations with an advanced zero trust system saved 43% on data breach costs. It’s also the easiest and most effective way to keep remote workers safe. Zero trust can take many forms, including multi-factor authentication, continuous verification, smart monitoring, least privilege, and micro-segmentation.
In addition to intelligent monitoring, there are many other ways to implement AI for data security.
Sergey Kondratenko notes that AI is trained to perform cognitive functions, such as tracking suspicious activity in the systems of financial institutions. For example, when an employee tries to view files they don’t normally view, or a credit card used outside of the customer’s daily routine. Anything out of the norm will be flagged so that intervention can be made.
That’s all a human can do, but the scale needed to deliver this service 24/7 around the world would be next to impossible without AI. It can be left running indefinitely to constantly monitor for suspicious behavior.
According to Teramind research, organizations using AI and security automation were able to detect and contain data breaches 27% faster than others.
Overcoming FinTech Cyber Threats Through Control and Regulation – Sergey Kondratenko
One important solution to cyber threats in fintech is partnering with reputable cybersecurity firms that specialize in fintech.
These firms have the experience and expertise to help fintech companies navigate a complex regulatory environment and implement effective cybersecurity measures,
explains Sergey Kondratenko.
Another solution, according to the expert, is a proactive approach to cybersecurity. That is, fintech firms can implement measures such as regular employee training, strong passwords, and encryption to reduce the risk of cyberattacks. By taking these steps, companies can improve their cybersecurity posture and reduce exposure to risk.
Thus, in order to keep pace with the high pace of technological innovation in the financial industry, the fintech cybersecurity regulatory framework is expanding rapidly. Although the legislation governing this direction is very different around the world. Authorities are increasingly focusing on ensuring that financial institutions put in place adequate safeguards against cyberattacks.
Sergey Kondratenko is convinced that financial institutions should keep abreast of developments in Fintech cybersecurity trends and issues and implement appropriate controls to mitigate risks already now for those who have not already done so. Indeed, failure to comply with this requirement can lead to significant financial losses.