In the early days of the internet, people were skeptical about giving out their personal, let alone financial data. Eventually, the stigma surrounding that has been eradicated. Nowadays, individuals feel comfortable sharing every detail of their lives.
Furthermore, online purchases have been increasing which indicates that there’s an increased trust in entering their financial data as well. This growth has resulted in companies having to improve the way they handle customer’s information and ensure maximum security and reliability.
Financial institutions and businesses that develop financial services and software have to put in extra care when it comes to building trust – and maintaining it after. Whether you’re a company looking for ways to deal with common cybersecurity risks or an individual who wants to see how online dangers work inside out, you should learn about cybersecurity challenges.
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Importance of cybersecurity for financial services
Cybersecurity shouldn’t be neglected regardless of the industry your company operates in and the amount of users that you have. If your company has at least a website, you need to ensure that your data is behind locked doors.
However, companies that develop online financial services need to consider a lot more factors. Starting from the fact that users will likely leave their personal documents such as IDs or driver’s licenses for identity confirmation, up to using these services to make payments. Most of the payment processing companies verify users with their government-approved identity.
You can always go for a careless route of doing the bare minimum for cybersecurity and hoping that nobody with malicious intent will take advantage of it. But don’t be surprised once your company gets fined by regulatory bodies and boycotted by users.
Your job as a company that develops financial services is to ensure that the financial assets of your users are protected. This usually requires implementing advanced encryption protocols that prevent anyone unauthorized from intercepting data.
Besides financial transactions, you need to take care of user data as well. Losing your customer information, account details, and transaction histories is considered as a breach of regulations such as GDPR or CCPA.
Cybersecurity plays a large part in developing financial services. Adhering to previously mentioned regulations, and protecting data and transactions are all parts of a healthy business. These points aren’t a one-time task, they are rather a continuous process that requires being constantly up-to-date with regulations and the cybersecurity landscape.
Insider threats and human errors
It’s funny how the term “insider threat” sounds like something you could hear from a sci-fi hacker movie. Yet, this problem isn’t as rare as it seems. While it’s much more likely to have an insider threat if you have a company with hundreds of employees, this problem can be present even in startup environments where everyone knows each other.
The source of insider threats is usually unsatisfied employees who are overworked and aren’t properly compensated. However, don’t discard the idea that the reason why someone might work against their company is because of personal reasons.
Regardless of the cause, you need to keep your employees satisfied and their morale high, while at the same time being careful with sharing sensitive data. To keep this problem in check, you need to delegate roles and permissions among your employees adequately.
Former employees might still have access to your operations which poses a security risk. Deactivating their accounts and changing important passwords should further improve security measures.
Another common problem is human errors. They usually occur because your employees aren’t knowledgeable about cybersecurity problems and protocols. If you’re making a wide-scale hiring operation for your financial company, it’s good to give higher chances to candidates trained in cybersecurity. However, you can also conduct courses and increase the knowledge of your current employees.
Of course, software developers are often much more aware of cybersecurity threats than employees in other branches. Unfortunately, this doesn’t mean that they are professional at integrating advanced cybersecurity principles when developing websites for financial services.
Use of fraud prevention software
When developing and maintaining financial services, you need to use the proper toolset to ensure maximum efficiency. Not only that the right tools help you with development itself, but they will also be useful for increasing security.
You can use popular tools for financial risk management that are flexible with end-to-end solutions. The real-time accuracy of such software will help you with making better and more informed decisions.
Financial fraud prevention software helps you internally by monitoring your cash flow giving you an insight into your financial situation. This software helps with ensuring compliance, onboarding new customers, and with detecting and preventing fraudulent activities.
More powerful tools in this category are great at proving that the requirements of financial service companies and institutions are met. They are usually paid per API call, and you should consider whether their pricing model is suitable for your budget. However, financial fraud prevention software will certainly ensure high levels of security.
Failing to comply with privacy regulations
Not complying with international and regional laws and regulations is a one-way ticket to bankruptcy. Regulatory bodies have started to pay additional attention to ways in which online businesses take care of their customers, and decided to ensure maximum transparency and fairness.
Regardless of the industry of your company, complying with these regulations is a must. But when it comes to financial services, privacy, and security should be taken to the next level. Even the slightest security breach can lead to your company being sued.
You need to do thorough research on the regulations of the country in which your company is based. On top of that, you need to comply with the laws of the countries from which your users are coming from. While one of the most important documents in this category is GDPR, various countries have their own unique regulations.
Every developer that’s working on financial services needs to be aware of these documents. To get help with this aspect of a business, you can look out for third-party solutions and services that will do the work for you.
Having individuals that will be in charge of checking whether you’re compliant with laws and regulations is also useful.
Modern technology in the use of malicious individuals
As long as there are businesses in this world, there will be people who will try to find ways to exploit or damage them. The Internet has always been a fertile soil for people with malicious intent to profit off.
Common online threats are ransomware and phishing attacks. The goal of a ransomware attack is to restrict a user’s access to its computer devices. Unfortunately, ransomware attacks can even contaminate larger computer networks, leading to serious problems for the company as a whole. These attacks are prevented by training your employees to recognize malware.
As a company, there aren’t exact steps to prevent phishing attacks from happening. Your best shot at it is to purchase domain names similar to yours, which hackers can use to create identical websites like yours and steal data. Furthermore, you can raise awareness and point out to your users how to recognize phishing websites.
Recently, the use of artificial intelligence and machine learning for conducting cyberattacks has been growing. To counter the latest malicious attacks, you should implement modern anti-virus and anti-fraud software.
Of course, widely recognized anti-virus software has been proven efficient in the past, but you should seek innovative solutions when dealing with more advanced and modern attacks. When developing your financial services, your programmers need to design the safety protocols with the sophistication of modern threats in mind.
Developing financial services requires advanced cybersecurity measures
In the past decades, we’ve seen corporations bankrupting because of poor handling of user financial and personal data. Some of them had cybersecurity weak points that they weren’t aware of, but there were also examples of companies purposefully misusing their resources.
Developing financial services requires a lot of responsibility and trust between your company and your users. You can never be too sure of your internal security, and it’s important to do regular audits and keep up with the cybersecurity trends.
With AI constantly advancing, keeping up with regulations and new threats is even more important. Even if you have a limited budget, cybersecurity isn’t where you should save your money.
If you are operating successfully and you have a potential for growth, don’t risk it because of an aspect that could have been fixed with a little bit more awareness or investment.