2018 Fintech Cybersecurity Predictions
Let’s keep the FinTech momentum going.
This year is a big year for FinTechs. With the arrival of PSD2 and GDPR in Europe, there are a number of new risks and regulations for FinTech companies to navigate. These new rulings bring the usage and storage of customer data into sharp focus; the repercussions of contravening the GDPR are severe, but those of PSD2 are yet to be decided.
As we know, the FinTech sphere has been expanding rapidly in recent years. Now home to a broad range of services, the sector has seen over USD 100 billion invested over the last five years alone. But in the wake of a rise in cyber breaches, the momentum of the industry is under threat.
The FinTech ecosystem is highly connected, complex and frenetic and so there are bound to be weak spots which hackers can exploit. It is crucial cybersecurity is a top priority for FinTechs as they begin to build brand trust and customer confidence – an area in which incumbent financial institutions still have the upper hand.
Further to these predictions there are a number of key trends FinTechs should note:
The number of firms offering digital financial services is booming. Many will have suitable security measures, but some will be lacking. FinTechs need to make sure they have suitable measures themselves to guard against vulnerabilities in third parties.
There will be more interfaces between incumbent financial institutions and FinTechs which mean there is scope for more cyber vulnerabilities which can be exploited. Therefore these interfaces must be scrutinised and tested regularly.
There is a mismatch between technology and regulation, especially in terms of cybersecurity. This is understandable given the pace of change in financial services compared to the more rigid regulatory frameworks. FinTechs should be on the lookout for regulators catching up like the recent EU releases of PSD2 and GDPR.
Machine learning is likely to play a larger role – both in cyber defence and cyberattacks. On one side AI and machine learning can help develop the best cybersecurity systems, yet on the other these can be used as a form of attack. FinTechs need to be mindful of these complexities.
Blockchain seems to have been the buzzword of the last few years. Realising its potential however will require a substantial amount of focus on cybersecurity, such as how private keys are stored, the methodology for confirming transactions and mechanisms of how consensus is obtained.
At Aon, we are sensitive to these predictions and trends and have designed solutions to help FinTech companies navigate all of these risks. We are excited to be helping the FinTech ecosystem continually grow and help develop the financial services sphere.
To help FinTech companies maintain robust cybersecurity operations, Stroz Friedberg has released a cybersecurity predictions report for 2018. Aon’s cyber security experts, Stroz Friedberg, aim to help organisations solve the complex challenges prevalent in today’s digital world.