Added 10 months ago By Kirby Dela Cruz
Financial Technology and its related software require a far bigger commitment to cybersecurity than any other software available. All software and technology traditionally need to keep up with strict security standards, particularly ones that require internet connection, as vulnerable personal and corporate information passes through them.
This concern over security becomes particularly important with Fintech and its software, which handle anything from an individual’s to a business’ financial data. Any vulnerability could and have been exploited by black hats online who habitually carry out attacks on unsuspecting end users. Apps and other related software to Fintech typically have a more heightened sense of security in their development, as they handle critical personal information, financial information, and would need to be internet-accessible to function.
There are certain trends and issues in Fintech that have been given light while considering these matters.
There is inequality between the technology and the regulations for it
More and more Fintech companies are emerging, bringing with them countless developments, innovations, and new software and applications. In 2013 alone there were 560 venture funding deals that took place, a number which seems small compared to the 1,223 deals that took place in 2015 and the first half of 2016.
This rapid growth within the Fintech field at such a short time makes it difficult for the regulatory committees that create security regulations and guidelines to catch up, especially with more and more innovations happening every day. Organizations tasked with making regulations should not be hasty in developing the rules. They must be mindful not to hinder Fintech development. At the same time, being too mindful and taking too long to create any rules might cause the regulators to get left behind in the advancement completely.
Open dialogue within Fintech
It has become clear that there needs to be an open, cooperative dialogue between regulators and Fintech entrepreneurs, and at the same time amongst the entrepreneurs themselves. Not only will it give regulators an improved sense of understanding of the technology, but entrepreneurs would be able to cooperate with each other to help the field grow in a way that would make it safe for everyone. This becomes especially important when you consider that the growing sophistication of security threats has not been addressed well enough by the market as a whole.
Australia has taken the initiative in this matter through their country’s Cyber Security Growth Center, which recently set forth plans for the National Fintech Cyber Security Design Challenge. It urges organizations to describe the security issues that they are facing and how start-ups would be able to help one another overcome these security issues. It also urges financial backers to incubate start-ups specifically designed to tackle these issues.
International cooperation may play a key role in the development of more sophisticated cybersecurity innovations to protect Fintech. As it is, the guarantee to secure demonetized payments currently stands at $50-100 million for the Fintech market for this financial year. It is a huge amount, and with the number of mobile wallet users ever increasing, it’s time to look at cybersecurity for the long-term game.
Companies from America, Russia, and Israel are being looked to ensure protection, and independent audits have become even more important in order to find holes and gaps. The whole market needs to be invested in this attention to cybersecurity for Fintech, and it needs the cooperation of everyone (companies, banks, governments around the world) to make sure that the market stays on top of the latest threats.
Cybersecurity is a big issue when it comes to digital payment methods. It can only grow through a worldwide cooperation and open dialogue, ensuring the protection of everyone’s interests, from companies to the end users.
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