When the pandemic struck, online bad actors took it as an opportunity to double-down on their attacks through ransomware, malware, and social engineering. Newly remote workers and remotely connected workplaces had to adapt rapidly to a greater digital threat as well as a public health crisis.
Now, cybersecurity may just be the most important aspect of financial technology (fintech) in the modern world. With 2020 being the worst year on record in terms of files exposed in data breaches, a thorough security approach is necessary to combat modern dangers.
Fintech relies on cybersafety more than any other digital platform. Luckily, new tech trends could help keep our financial data safe even with an increase in risk. Here’s what you should know.
The Rising Risks
The widespread shift to a work-from-home (WFH) economy left countless networks vulnerable to cyber attacks. Hastily implemented cloud data processes and security needs failing to keep pace with tech innovations have left financial data exposed. Meanwhile, greater reliance on mobile devices for everything from managing our bank accounts to checking credit scores leaves fintech users more at-risk than ever.
Among the many security risks of personal finance technology are the following:
- Hundreds of fintech ventures are funded each year, with little change in the security landscape.
- New users unfamiliar with cybersecurity concerns can inadvertently expose their data.
- Fraud and identity theft are on the rise, with online shopping hacks and COVID-related scams popular among cybercriminals.
Insider threat is predicted to be the number one risk to data classification in the year ahead, requiring stricter corporate guidelines in data protection and better employee education. The heightened risk of a pandemic economy requires innovative solutions in approaching fintech. Fortunately, emerging trends in the financial technology sector may have the potential to turn the tide of cybercrime and keep our financial data safe.
Fintech Trends for 2021 and Beyond
Even in the deluge of attacks on our digital systems, defender confidence has remained strong. This is due to the trends shaping the cybersecurity and fintech sectors, applications of intelligent processes that can predictively model attacks and pre-emptively counter them. The fintech industry is rising to meet the increased demand of the modern era, and this means broader benefits and heightened security for all consumers.
Among the trending innovations making fintech more secure, these technologies stand out:
1. Multi-cloud data storage.A singularly public cloud storage system may not meet the needs of many financial institutions. Instead, the safety of a private cloud is often preferable. Luckily, multi-cloud solutions offer the best of both worlds, giving businesses greater transparency and security in their data usage while providing a back-up system for vulnerable data.
2. AI fraud detection.Financial institutions like MasterCard are adopting artificial intelligence and machine learning processes to predict and prevent fraud. These systems analyze data to rank client risk and examine behaviours, flagging any vulnerabilities. Because an AI can better analyze massive amounts of data to catch unauthorized usage faster, these tools can help secure fintech as 5G connectivity comes to the Internet of Things (IoT).
3. Secure Access Service Edge (SASE) networks.SASE network architecture, like multi-cloud storage, brings multiple systems together to link security solutions for the greatest effect. This trend in fintech combines wide-area networking with network security services to offer a comprehensive cloud service. As tech consolidation remains a trend among businesses, these solutions can help protect fintech while offering greater functionality, all in one simple package.
4. Blockchain systems.Blockchains are highly secure and decentralized data flow systems. They offer all but immutable data stored in cryptographic hashes. This makes hacking such a system particularly difficult, as doing so requires decrypting every node in the link. For global finance, these systems make secure and seamless transactions possible, which is why they will likely become a staple of fintech soon.
5. Regulatory technologies (Regtech).As political administrations change and governments increasingly seek to encourage broader cybersecurity regulations, the prominence of regtech can help sustain fintech security. These technologies are built to manage big data usage to ensure compliance with government standards. Often, this includes data encryption and de-identification processes meant to ensure consumer privacy.
A More Secure Future
As innovations like AI and machine learning became a standard of fintech cybersecurity, we can look forward to a world of safer data. This will require, however, highly certified and trained cybersecurity professionals who can assist companies in adopting and maintaining the new fintech.
Right now, the shortage of cybersecurity professionals is estimated to be as high as 3.5 million, and while AI can fill in, it cannot replace the need for human oversight. This makes cybersecurity a career that is more or less safe from automation, like many other careers that will likely remain safe from the practice. Instead of displacing work as AI might do to 20 million-plus manufacturing jobs, artificial intelligence stands to supplement skill shortages to make effective security more accessible.
With trends like blockchain and regtech emerging as helpful tools in the fight against cybercrime, the next step will be training a large enough security workforce to properly integrate this tech for the best results. Then, the potential of fintech tools can be effectively maximized for safer data security in the marketplace.