As financial
technology, or ‘fintech’, continues to revolutionize the financial
industry, new cybersecurity threats emerge. Cybercriminals are constantly
devising new ways to infiltrate systems and access sensitive financial data,
ranging from social engineering to ransomware.
In this
article, we’ll go over the top fintech cybersecurity threats and how to protect
yourself and your company from them.
Attacks
Using Social Engineering
For fintech
companies, social engineering attacks are a common cybersecurity threat. The
practice of manipulating individuals into disclosing confidential information
or performing actions that could compromise security is known as social
engineering. This can take many different forms, such as phishing, pretexting,
and baiting.
The practice of
sending fraudulent emails or messages that appear to come from legitimate
sources, such as banks or financial institutions, is known as phishing. The
goal is to dupe the recipient into providing personal information, such as login
information or credit card numbers.
Cybercriminals
who have gained access to a company’s email system and send messages that
appear to come from someone within the organization are frequently used in
phishing attacks.
Another social
engineering tactic is pretexting, which involves fabricating a false pretext or
scenario in order to obtain sensitive information. A cybercriminal, for
example, may impersonate a customer service representative and request personal
information from the customer, such as their account number or password.
Baiting entails
providing something of value in exchange for personal information, such as a
free gift card or download. This is especially useful in the fintech industry,
where customers are frequently looking for ways to save money or earn rewards.
To defend
against social engineering attacks, it is critical to educate employees and
customers about the tactics used by cybercriminals. Employees can benefit from
regular training sessions to recognize phishing emails and other fraudulent
messages. To protect sensitive information, it’s also a good idea to use
two-factor authentication and encryption.
Ransomware
and Malware Attacks
Malware and
ransomware attacks are yet another common threat to fintech firms. Malware is
software that is intended to harm, disrupt, or gain unauthorized access to a
computer system. Ransomware is a type of malware that encrypts the files of a
victim and demands payment in exchange for the decryption key.
Because they
frequently store large amounts of sensitive data, including customer financial
information, fintech companies are particularly vulnerable to ransomware
attacks. After a ransomware attack, it can be difficult to recover data without
paying the ransom, which can be costly.
It is critical
to keep software up to date and use strong antivirus software to protect
against malware and ransomware attacks. Regular backups can also aid in
mitigating the effects of a ransomware attack.
Insider
Dangers
Insider threats
pose a significant cybersecurity risk to financial technology companies.
Employees who steal information on purpose, employees who accidentally disclose
sensitive information, or employees who are tricked into providing access to
sensitive data are all examples of insider threats.
It is critical
to have a comprehensive cybersecurity policy in place to protect against
insider threats.
Regular
employee training sessions, background checks for new hires, and strict access
controls should all be part of this policy. It’s also a good idea to keep an
eye on employee behavior in order to spot any suspicious activity.
Third-Party
Dangers
Third-party
risks are another major cybersecurity threat for fintech firms. Third-party
risks are those associated with a breach or other security incidents caused by a
third-party vendor or partner.
A
cybercriminal, for example, could gain access to a fintech company’s system via
a vulnerability in a third-party vendor’s software.
To guard
against third-party risks, thoroughly vet vendors and partners before working
with them.
This should
include background checks as well as a review of their security policies and
practices. Contracts with third-party vendors should include cybersecurity
requirements. This includes their security posture on a regular basis to ensure
they are meeting those requirements.
Frameworks
for Cybersecurity
Implementing a
cybersecurity framework is an efficient way for fintech companies to protect
themselves from cyber threats. A cybersecurity framework is a set of best
practices and guidelines for managing cybersecurity risks.
The National
Institute of Standards and Technology (NIST) Cybersecurity Framework, the
Payment Card Industry Data Security Standard (PCI DSS), and the ISO 27001 are
all popular frameworks.
A cybersecurity
framework can assist fintech firms in identifying and mitigating risks,
implementing security controls, and developing incident response plans. It is
critical to select a framework that aligns with the goals and needs of your
organization.
What Are the Most Common Fintech Cyber Threats?
There are risk
factors which fintechs must take into account. We’ve highlighted 4 of the most
important ones.
Identity
Theft & Phishing
Identity theft
is still a moderate risk which fintechs must tackle as both actual account
takeovers and attempted takeover rates are still relatively high.
Hackers either
steal or hack one’s login credentials and impersonate the account holders to
gain access to their personal (and often sensitive) information and steal their
money. This is usually done via API attacks targeted at compromising auth
tokens.
As such, having
a strong auth becomes quintessential in any fintechs’ security policy.
As for phishing
attacks, phishing emails have evolved and become almost indistinguishable from
legitimate institutional emails. And, once hackers gain access to the users’
system, there’s ample opportunity for id theft.
Data
Breaches
Fintechs obtain
large amounts of data, both personal and financial, from their users, including credit
card info, bank account numbers, and even answers to security
questions.
This makes
their databases a true hacker honeypot as hackers can use said data or sell it
to other people.
To do so,
malware and phishing attacks are the usual go-to methods. Once again API
endpoints are targeted, so it becomes important to test every outcome and
possibility of API abuse.
Distributed Denial of Service Attacks (the Infamous DDoS Attack)
A DDoS attack,
in simple terms, happens when hackers attempt to flood a website or app with
traffic.
They do so as
it’s their preferred method of crashing it. By crashing the app, they aim at
forcing a security breakdown as well.
DDoS attacks
are incredibly dangerous for fintechs as many APIs out there simply do not come
with rate-limiters. Rate limiters will restrict the frequency or
number of user or IP requests and, thus, help against distributed denial of
service attacks.
AI Fuzz Testing (AI Fuzzing)
AI has proven
itself to be a consistently good resource for fintechs around
the world. However, it can also help hackers’ exploits as they found a way to
‘scramble’ APIs via AI Fuzzing.
The goal here
is to confuse APIs with random bits of invalid data or unexpected data as a way
of finding errors, crashes, and memory leaks.
Conclusion
Fintech firms
are increasingly vulnerable to cybersecurity threats ranging from social
engineering to ransomware. To combat these threats, it is critical to educate
employees and customers about cybersecurity best practices, keep software up to
date, implement strong access controls, and manage risks using a cybersecurity
framework.
Fintech
companies can help ensure the security of their customers’ financial
information and maintain the trust of their stakeholders by taking these steps.
Furthermore,
fintech firms must maintain vigilance and be proactive in their approach to
cybersecurity. They should conduct vulnerability scans and penetration testing
on a regular basis to identify potential vulnerabilities.
It’s also
critical to have an incident response plan in place that outlines what to do if
a cybersecurity incident occurs.
When selecting
third-party vendors and partners, fintech companies should prioritize
cybersecurity. This includes thoroughly screening vendors, auditing their
security practices, and incorporating cybersecurity requirements into
contracts.
Finally,
fintech cybersecurity threats pose a significant threat to the financial
industry. Fintech companies can protect against these threats and maintain the
trust of their customers and stakeholders by implementing best practices and a
comprehensive cybersecurity framework.
As the fintech industry grows and evolves, it’s
critical to stay vigilant and proactive in the fight against cybercrime.
As financial
technology, or ‘fintech’, continues to revolutionize the financial
industry, new cybersecurity threats emerge. Cybercriminals are constantly
devising new ways to infiltrate systems and access sensitive financial data,
ranging from social engineering to ransomware.
In this
article, we’ll go over the top fintech cybersecurity threats and how to protect
yourself and your company from them.
Attacks
Using Social Engineering
For fintech
companies, social engineering attacks are a common cybersecurity threat. The
practice of manipulating individuals into disclosing confidential information
or performing actions that could compromise security is known as social
engineering. This can take many different forms, such as phishing, pretexting,
and baiting.
The practice of
sending fraudulent emails or messages that appear to come from legitimate
sources, such as banks or financial institutions, is known as phishing. The
goal is to dupe the recipient into providing personal information, such as login
information or credit card numbers.
Cybercriminals
who have gained access to a company’s email system and send messages that
appear to come from someone within the organization are frequently used in
phishing attacks.
Another social
engineering tactic is pretexting, which involves fabricating a false pretext or
scenario in order to obtain sensitive information. A cybercriminal, for
example, may impersonate a customer service representative and request personal
information from the customer, such as their account number or password.
Baiting entails
providing something of value in exchange for personal information, such as a
free gift card or download. This is especially useful in the fintech industry,
where customers are frequently looking for ways to save money or earn rewards.
To defend
against social engineering attacks, it is critical to educate employees and
customers about the tactics used by cybercriminals. Employees can benefit from
regular training sessions to recognize phishing emails and other fraudulent
messages. To protect sensitive information, it’s also a good idea to use
two-factor authentication and encryption.
Ransomware
and Malware Attacks
Malware and
ransomware attacks are yet another common threat to fintech firms. Malware is
software that is intended to harm, disrupt, or gain unauthorized access to a
computer system. Ransomware is a type of malware that encrypts the files of a
victim and demands payment in exchange for the decryption key.
Because they
frequently store large amounts of sensitive data, including customer financial
information, fintech companies are particularly vulnerable to ransomware
attacks. After a ransomware attack, it can be difficult to recover data without
paying the ransom, which can be costly.
It is critical
to keep software up to date and use strong antivirus software to protect
against malware and ransomware attacks. Regular backups can also aid in
mitigating the effects of a ransomware attack.
Insider
Dangers
Insider threats
pose a significant cybersecurity risk to financial technology companies.
Employees who steal information on purpose, employees who accidentally disclose
sensitive information, or employees who are tricked into providing access to
sensitive data are all examples of insider threats.
It is critical
to have a comprehensive cybersecurity policy in place to protect against
insider threats.
Regular
employee training sessions, background checks for new hires, and strict access
controls should all be part of this policy. It’s also a good idea to keep an
eye on employee behavior in order to spot any suspicious activity.
Third-Party
Dangers
Third-party
risks are another major cybersecurity threat for fintech firms. Third-party
risks are those associated with a breach or other security incidents caused by a
third-party vendor or partner.
A
cybercriminal, for example, could gain access to a fintech company’s system via
a vulnerability in a third-party vendor’s software.
To guard
against third-party risks, thoroughly vet vendors and partners before working
with them.
This should
include background checks as well as a review of their security policies and
practices. Contracts with third-party vendors should include cybersecurity
requirements. This includes their security posture on a regular basis to ensure
they are meeting those requirements.
Frameworks
for Cybersecurity
Implementing a
cybersecurity framework is an efficient way for fintech companies to protect
themselves from cyber threats. A cybersecurity framework is a set of best
practices and guidelines for managing cybersecurity risks.
The National
Institute of Standards and Technology (NIST) Cybersecurity Framework, the
Payment Card Industry Data Security Standard (PCI DSS), and the ISO 27001 are
all popular frameworks.
A cybersecurity
framework can assist fintech firms in identifying and mitigating risks,
implementing security controls, and developing incident response plans. It is
critical to select a framework that aligns with the goals and needs of your
organization.
What Are the Most Common Fintech Cyber Threats?
There are risk
factors which fintechs must take into account. We’ve highlighted 4 of the most
important ones.
Identity
Theft & Phishing
Identity theft
is still a moderate risk which fintechs must tackle as both actual account
takeovers and attempted takeover rates are still relatively high.
Hackers either
steal or hack one’s login credentials and impersonate the account holders to
gain access to their personal (and often sensitive) information and steal their
money. This is usually done via API attacks targeted at compromising auth
tokens.
As such, having
a strong auth becomes quintessential in any fintechs’ security policy.
As for phishing
attacks, phishing emails have evolved and become almost indistinguishable from
legitimate institutional emails. And, once hackers gain access to the users’
system, there’s ample opportunity for id theft.
Data
Breaches
Fintechs obtain
large amounts of data, both personal and financial, from their users, including credit
card info, bank account numbers, and even answers to security
questions.
This makes
their databases a true hacker honeypot as hackers can use said data or sell it
to other people.
To do so,
malware and phishing attacks are the usual go-to methods. Once again API
endpoints are targeted, so it becomes important to test every outcome and
possibility of API abuse.
Distributed Denial of Service Attacks (the Infamous DDoS Attack)
A DDoS attack,
in simple terms, happens when hackers attempt to flood a website or app with
traffic.
They do so as
it’s their preferred method of crashing it. By crashing the app, they aim at
forcing a security breakdown as well.
DDoS attacks
are incredibly dangerous for fintechs as many APIs out there simply do not come
with rate-limiters. Rate limiters will restrict the frequency or
number of user or IP requests and, thus, help against distributed denial of
service attacks.
AI Fuzz Testing (AI Fuzzing)
AI has proven
itself to be a consistently good resource for fintechs around
the world. However, it can also help hackers’ exploits as they found a way to
‘scramble’ APIs via AI Fuzzing.
The goal here
is to confuse APIs with random bits of invalid data or unexpected data as a way
of finding errors, crashes, and memory leaks.
Conclusion
Fintech firms
are increasingly vulnerable to cybersecurity threats ranging from social
engineering to ransomware. To combat these threats, it is critical to educate
employees and customers about cybersecurity best practices, keep software up to
date, implement strong access controls, and manage risks using a cybersecurity
framework.
Fintech
companies can help ensure the security of their customers’ financial
information and maintain the trust of their stakeholders by taking these steps.
Furthermore,
fintech firms must maintain vigilance and be proactive in their approach to
cybersecurity. They should conduct vulnerability scans and penetration testing
on a regular basis to identify potential vulnerabilities.
It’s also
critical to have an incident response plan in place that outlines what to do if
a cybersecurity incident occurs.
When selecting
third-party vendors and partners, fintech companies should prioritize
cybersecurity. This includes thoroughly screening vendors, auditing their
security practices, and incorporating cybersecurity requirements into
contracts.
Finally,
fintech cybersecurity threats pose a significant threat to the financial
industry. Fintech companies can protect against these threats and maintain the
trust of their customers and stakeholders by implementing best practices and a
comprehensive cybersecurity framework.
As the fintech industry grows and evolves, it’s
critical to stay vigilant and proactive in the fight against cybercrime.
