Fintech companies must plan for and build in from the very beginning effective ways to address cybersecurity, data security, and privacy protection. This is absolutely essential because these particular threats are proliferating and thus pose increasing danger to fintech companies and the customers who use their services. The reliance on “big data” by many companies means that more and more personal and proprietary data is potentially vulnerable to being breached and accessed by malicious entities.
A fintech company that allows its data to be accessed and exposed to malicious use by “bad actors” because of insufficient safeguards — something that’s happening far too often these days, unfortunately — risks its reputation and in turn the likely loss of many customers who no longer have faith and trust in them.
So what should fintech companies do to best protect themselves and their customers? Well, certainly they must be extremely proactive in anticipating things that could go wrong and then putting in place robust, effective measures to prevent, or at least greatly mitigate, them from having serious problems in the areas of cybersecurity, data security, and privacy protections. Protective measures put in place must extend throughout product and service lifecycles.
Security in all of its aspects has to be the top priority within the fintech community in order to properly safeguard institutional and consumer data. In addition, every fintech company, no matter its size, has a solemn responsibility to do what’s needed to protect the overall financial services industry infrastructure, especially because many financial transactions take place across an interconnected global data communications enterprise, which increases overall vulnerability.
Some of the core security-related issues for which fintech companies must be adequately and proactively prepared include the following: data breaches; data loss; hijacking of accounts; denial of service attacks; insider threat; malware injection; insufficient due diligence; insecure APIs; abuse of cloud services; and shared vulnerabilities.
Any fintech company that doesn’t do everything in its power to protect itself and in turn its customers from suffering the bad consequences of poor security practices, is without a doubt egregiously derelict in its duty.