The transition to a digital environment occurs so quickly and most businesses are not prepared to account for all of the risks that digitalization can bring. Thus, financial institutions will continue to be the most common targets of cyber attacks. New regulations have been enacted to strengthen their cyber security defences.
Despite this, financial institutions are still undergoing ongoing digital transformation following the Covid-19 pandemic. Malicious actors are exploiting such situations and posing a growing threat to financial institutions. As long as there is a need for digital infrastructure, the financial system will remain vulnerable.
It’s important to be aware of the risks and to mitigate them and improving financial system security is primarily an organisational challenge. Technical solutions are not an issue here because many organisations prioritise this aspect of cyber security in their budget. The main issue may be how to organise the organisation so that cyber security resources are used effectively. As new technologies emerge, cyber security will become an increasingly important asset to consider.
What are the challenges for fintech in cyber security?
Passwords, encryption, multi-factor authentication, and logins have traditionally been the focus of cybersecurity. It is still solely the responsibility of IT departments, and it is still a technical issue. Employee behaviour, on the other hand, is primarily responsible for increased cyber security risks. According to Endpoint Ecosystem, employees’ behaviour is a major contributing factor to the heightened cyber threats. Many employees believe that storing organisational passwords in personal journals, for example, is not a problem. Some even allow family members to use work-related devices.
One example of cyber security in fintech
Sweden’s financial system, for example, has a large sector of digital services and e-identification. Sweden is one of the countries that is ahead of the curve in terms of digitisation and digital service providers. There is some evidence that increased collaboration between the commercial sector and the government can improve resilience to cyber threats and attacks. It is especially important for financial institutions and their customers who are state citizens.
Along with the establishment of the National Cyber Security Centre and collaboration among national establishments on cyber security issues, citizens’ cyber security awareness should be increased. Sweden frequently uses the Bank ID system as a form of e-identification, for example, when signing up for a Covid vaccine, installing Wi-Fi at home and opening a bank account. It is an important national service. If it is hacked, the entire society suffers, not just the payment system.
Cyber security is something that is constantly discussed in the news. Whether it’s the latest malware threat or what new laws are being passed, it’s something that will be constantly changing. At the end of the day, it comes down to developing a national framework for cyber security in order to eliminate threats to society, including the society this framework is developed for.