Many times when banks and financial institutions implement fintech services from untrusted service providers, they end up losing their valuable data, face service failures, and suffer the loss of reputation because of inadequate data.
Fremont, CA: Over the past years, fintech has significantly enhanced the products and services of traditional financial businesses. Although many financial institutions have adopted fintech, there are still some obstacles faced by this sector. Here are five risks concerned with the fintech services:
Data plays an important role in banks and financial institutions. But with the entry of inefficient fintech systems, the issues with data violation increased in the finance industry.
Hackers can easily access payment card details and user information, making online transactions vulnerable to cyber thefts. As financial institution partners with third parties, data losses may occur because of their inefficient fintech services.
Application Security Risk
Banks implement fintech apps to access the financial information of their customers in real-time to carry out transactions or perform other banking operations. But, if a software application does not have fool-proof security modules and efficient codes, it will be easily susceptible to cyber theft. Attackers can take advantage of the weak security of the application to steal customer data and other sensitive information.
Third-party Security Risks
For banks, internal security is not always enough. Many times when banks and financial institutions implement fintech services from untrusted service providers, they end up losing their valuable data, face service failures, and suffer the loss of reputation because of inadequate data.
These kinds of damages often happen because of third-party security risks. To remove third-party risks related to fintech services, banks and financial institutions need to evaluate the fintech relationship-related risks in their risk management assessment.
The most well-known security issues in the global market are malware attacks and hacking. Hackers are easily targeting the Society for Worldwide Interbank Financial Telecommunication (SWIFT) systems, which are used by almost all banks and major financial institutions to exchange critical financial information.
The recent cyberattack on SWIFT infrastructure showed the level of advancement of hackers and malware attackers. These hackers take advantage of the loopholes in banks and financial institutions’ operations and execute malware attacks