The Fintech industry has modest legal regulations and offers flexible products. The shorter time-to-market advantage of fintech companies and startups makes them worth exploring from the business perspective. However, the rapid release cycles of fintech companies often lead to overlooked cybersecurity measures. This puts many fintech companies at security risk. The poorly secured Fintech products are likely to encounter many cybersecurity threats. This makes the Fintech industry attractive to cybercriminals and invites trouble. The common cybersecurity challenges in the Fintech industry include identity theft and money laundering. 

Identity Theft

The Fintech industry faces identity theft problems a lot. Criminals steal personal information of fintech industry customers like social security numbers and banking details. Criminals can use personal information of a fintech company’s client and impersonate them. They can get unauthorized access to their financial account and make fraudulent transactions. They can even open bank accounts in the name of the victim and drain their funds. Without strong cybersecurity measures, fintech users remain vulnerable to identity fraud.

Frauds

Cybersecurity challenges faced by the fintech industry include frauds. From payment frauds to phishing scams, criminals can exploit financial transactions in the fintech industry to steal money from users. They can manipulate personal information of customers of fintech startups and exploit cybersecurity vulnerabilities in online systems. The sensitive customer data stored by fintech companies makes them vulnerable to cyberattacks. 

Money Laundering

The Fintech industry has to deal with money laundering problems on an everyday basis. The rapid digital transactions in the fintech industry make them vulnerable to criminals. They can disguise the origin of finances and make suspicious activities undetectable in fintech transactions. The minimal physical interaction and large transaction volume in Fintech further make money laundering convenient here.  

Application Breaches

Criminals can find unauthorized access to fintech applications and steal sensitive customer information including transaction history and details. Many Fintech companies and startups have been victimized by fraudsters and faced severe reputational damage. The highly sensitive nature of the fintech industry puts the data in fintech applications at risk. Cybersecurity weaknesses, such as weak passwords and lack of encryption, make fintech apps an easy target for cybercriminals.

Data Leaks

Criminals can access sensitive customer data through hacking attacks. The personal identification and credit card information of customers can be stolen by unauthorized individuals and promote potential identity theft. This is why many finance companies have faced severe reputation damage in the past. The malicious actions by employees in fintech companies can also give fraudsters access to sensitive information of customers. 

Spoofing

Cybersecurity challenges faced by Fintech companies also include spoofing. Cyber criminals who disguise themselves as legitimate entities and deceive users and fintech customers can gain access to their sensitive information. The bank details and login credentials of fintech customers can be stolen by fraudsters who impersonate trusted institutions. These tricksters can use critical data of customers. They can even send malicious links through email, phone calls, and SMS to trick the user.

Malware Attacks

Malware attacks is another cybersecurity challenge faced by the Fintech industry globally. The deceptive emails and compromised fintech systems is the reason why so many phishing attacks and insider threats happen in the industry.