5 Data Security Solutions Fintechs Should Implement Now
The fintech market is evolving rapidly.
The global fintech market value is estimated at 170 billion USD, and even conservative estimates place fintech revenue comfortably within the 1 trillion range over the next decade.
The fintech space is made up of exponentially growing market segments. Mobile payments, digital investments, crowdfunding, digital assets, neobanking—the list goes on. These rising trends are fueled by increased smartphone and internet adoption. Regulatory changes have leveled the playing field for many fintech firms, and advancements in AI and blockchain technology drive further innovation.
In short, innovation and disruption are what successful fintechs are built on. Once you have a great idea, you execute it. But after you execute it, you must protect it.
That’s where payment security solutions come into play. Fintechs not only have unique opportunities but unique security challenges as well. Because they’re an evolving industry with vast amounts of sensitive financial data, they are prime targets for cybercriminals.
To help you protect your data (and earn your customers’ trust), we’d like to walk you through five payment security essentials specific to fintechs.
First, let’s revisit those unique security challenges we mentioned.
Fintech Cybersecurity Challenges
Payment Fraud
Payment fraud is a persistent issue where threat actors use deception or theft to facilitate unauthorized transactions. Identity theft, phishing attacks, and card skimming are common tactics used for payment fraud.
Data Breaches and Leaks
Given their digital-first approach, fintech companies are particularly vulnerable to data breaches and leaks. These occur when unauthorized entities access sensitive data, including customer information and transactional details.
Regulatory Compliance
Fintech companies must navigate a complex maze of compliance mandates such as PCI DSS, GDPR, and numerous mandates specific to regions or countries. Fintech companies must stay ahead to ensure optimal data protection and regulatory compliance in the ever-evolving cybersecurity and regulatory landscape.
Insider Threats
Insider threats arise from organization members who misuse their access to systems and data. Insider threats circumvent external safeguards and can be especially difficult to identify in time to prevent data compromise.
Infrastructure Attacks
Ransomware attacks and distributed denial of service (DDoS) attacks compromise an organization’s control over its core infrastructure. These attacks can overwhelm security teams and systems and bring a fintech’s operations to a grinding halt.
When that happens, legitimate users are denied service and locked out of critical data and applications. This disrupts business operations and often serves as a smokescreen for more insidious attacks.
Payment Security Solutions for Fintechs
1. Migrate to the Cloud
Cloud solutions are ideal alternatives to on-premises hardware. They take away the upfront cost of deploying cryptography, eliminating the barrier to entry.
A significant advantage of cloud solutions is centralization. This reduces management overhead and streamlines cryptographic workflows, taking up fewer resources. Deploying cloud-based platforms also enables instant upgrades and patches crucial to safeguarding sensitive data.
2. Use Hardware-backed Cryptography
Hardware Security Modules (HSMs) are secure devices that store encryption keys and run cryptographic functions behind a tamper-resistant casing. HSMs are significantly more secure than storing cryptographic keys in a local hard drive or running encryption in a browser. HSMs are highly versatile, too: you can deploy them on-premises or in the cloud.
Importantly, HSMs help fintechs adhere to various regulations that mandate using HSMs for data protection.
3. Deploy Key Management
Some business applications might offer basic key management functionality. However, fintechs wishing to protect their infrastructure and assets eventually need the extra layer of security, interoperability, and scalability that a dedicated key management solution provides.
Advanced key management solutions offer centralized control, comprehensive security policies, and seamless integration capabilities. These are essential for fintechs that use multiple business applications.
4. Implement PKI and CA
Public Key Infrastructure (PKI) and Certificate Authorities (CA) help authenticate users and devices. This facilitates secure data exchange across an enterprise. Without PKI and CA, networks are exposed to various vulnerabilities, especially lateral system movement by an attacker.
A strong PKI framework is about issuing certificates and the capability to manage, renew, and revoke them effectively. This ensures a trusted environment for all transactions.
5. Employ General-purpose Encryption
Fintechs should use general-purpose encryption solutions to protect databases, applications, and emails. This is another excellent way to shore up your defenses and limit hackers’ options during an attempted breach.
Leveraging encryption, fintech firms create an additional layer of security, rendering any breached or leaked data useless without the corresponding decryption keys.
Next Steps
Implementing robust encryption techniques, hardened security protocols, and advanced key management systems in an increasingly complex threat landscape is no longer optional but necessary.
These tips will help you get a jump start on your payment security blueprint. To learn more about the dynamic landscape of fintech and more expert guidance, check out our blog on financial services cybersecurity.
FAQ
How do fintechs ensure data protection and regulatory adherence amid complex regulations like PCI DSS, GDPR, and regional laws, in the ever-changing cybersecurity landscape?
Fintechs navigate the complex regulatory landscape by actively staying informed about and adhering to compliance mandates like PCI DSS, GDPR, and region-specific regulations. They employ robust internal processes and technologies to ensure optimal data protection, adapting to evolving cybersecurity standards. Regular assessments, audits, and updates are integral parts of their strategy to maintain regulatory compliance and protect sensitive financial data.
How does cloud migration benefit fintechs’ payment security by simplifying tasks, streamlining workflows, and ensuring timely upgrades to safeguard data?
Migrating to the cloud significantly enhances payment security for fintechs by reducing management overhead and streamlining cryptographic workflows. Cloud solutions eliminate upfront costs associated with deploying cryptography, making entry more accessible. Moreover, centralized control in the cloud facilitates seamless management of cryptographic workflows with fewer resources. Instant upgrades and patches provided by cloud platforms are crucial for safeguarding sensitive data, ensuring fintechs can adapt rapidly to emerging security threats.
How do HSMs benefit fintechs in enhancing security, versatility, and regulatory compliance in data protection?
The practical implementation of Hardware Security Modules (HSMs) for fintechs involves deploying secure devices that store encryption keys and run cryptographic functions within tamper-resistant casings. HSMs contribute to enhanced security by offering significantly more secure storage of cryptographic keys compared to local hard drives or browser-based encryption. Their versatility is highlighted by the option to deploy them on-premises or in the cloud. Importantly, HSMs aid fintechs in maintaining regulatory compliance, as various regulations mandate their use for data protection, ensuring a robust and secure financial environment.
