The financial services industries are a major target for cyber crimes—can companies keep data safe with the current fintech security measures?
In 2015, three men were charged as co-conspirators in a theft that is considered one of the largest in the history of U.S. financial institutions.The JP Morgan hack played out like a plot line from Ocean’s Eleven with the ringleaders outsourcing hacking jobs to break into the banking giant. Yet, in this case, the stolen data wasn’t credit card numbers or banking information—it was emails. The perps used the stolen email data to manipulate the stock market, earning them millions of dollars.
The world of cyber crime is intensifying and, as always, the financial services sector is one of the most sought after targets.
The current state of fintech security
Hacks, security breaches, and a lack of trust by consumers is becoming commonplace. The need for new solutions is becoming more obvious, and IT and fintech security budgets across the private and public sectors are increasing accordingly. As a result, cyber security has become the fastest-growing sector in IT. According to Gartner, the global spending for cyber security was nearing $76.1 billion in 2015—and that number is expected to rise to $170 billion by 2020.
As the numbers clearly demonstrate, making sure your fintech business is secure is an absolute must. The last thing any financial institute wants is to become the victim of a crime. The result could be a massive loss of customers, a damaged brand reputation, and legal and financial liabilities that may be impossible to recover from.
Defining a risk management strategy
While companies will never be completely insulated from hacks and security breaches, defining a clear risk management strategy is vital.
Institutions should focus on risk management, and create a plan to adopt and define security mechanisms that will allow them to mitigate specific threats.
Here are some of the most important steps that fintech organizations can take to improve the safety of their operations while protecting their consumers:
- Provide strategic oversight
It’s important to ensure that your board of directors provides strategic oversight around information security strategy and processes.
- Invest in security
You’ll want to ensure that the right information security investments are made. This involves hardware and software investments, as well as investing in and educating your employees—they must be aware of current policies and procedures.
- Provide regular updates
Regularly update the board on the efficacy of your security program(s). You’ll want to remain in constant communication so that everyone is on the same page.
- Avoid public cloud
There are a number of reasons to avoid the public cloud. Your data could be at risk (if you work with a disreputable or lesser known company), you’re more susceptible to attacks (if working with one of the larger companies) and you could get locked out of your own information. Instead, it’s best to develop a private or hybrid cloud or data storage system.
- Conduct audits
Conduct thorough audits of your organization technology partners to ensure weaknesses are addressed and risk is properly managed. Your company should pay particular attention to the following:
- Board oversight: To what degree is the board involved in the day-to-day business?
- Technical and managerial expertise of key employees
- Adequacy of procedures related to technology and data security
- Robustness of internal audit and controls
- Educate your workforce
Your employees need to know the truths and most common myths about fintech security. Overall, you want to ensure your employees have:
- Faith in the security level of your product(s).
- The right tools/knowhow to address common security issues so they can detect, report, and (if possible) circumvent any issues.
- Implement network security protections
This will protect your company against internal unauthorized access and/or inadvertent damage to the network.
- Monitor and analyze
Your team should be vigilantly watching all systems for any types of attacks or threats. This should be done on a near obsessive level. Not only will you need to watch, but you should also analyze all information to make sure you are not leaving any gaps open.
- Assign a leader
You’ll want to put a dedicated senior executive in charge of overseeing data security.
- Learn from mistakes
It’s unfortunate, but true: mistakes will happen. When mistakes are made, the best thing to do is learn from it and fortify current holdings.
It takes a lot of energy and effort to put the above strategies into place, but you don’t need to go through it alone. There are plenty of companies, consultants, and experts who can advise and oversee your fintech security strategy. Get the help and guidance you need before it’s too late.