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Fintech, new technologies, new risks.
Marina Córdoba Poveda // 02 October 2018
What are Fintech?
A ‘roughly’ we could explain the Fintech as companies that develop financial services based on technological innovation.
However, this term implies for many other connotations, being one of them the result of uniting these organizations to the concept of ‘startups’. This would be a nuance in its definition: “technological companies that offer financial services outside of the large traditional companies, generating added value for both the service and the consumer”.
And what services do they provide?
Management of personal finances, loans, credits, development of financial security systems, cryptocurrencies … That is, as many combinations as we have imagination.
What is the secret of its great development at present?
The Fintech are the result of the distrust generated on traditional banking after the great crisis caused by the fall of investment bank Lehman Brothers. Thus new investment and financing alternatives were proposed, which also contributed an additional value, the use of the latest technologies.
Innovations such as Blockchain, BigData, Artificial Intelligence, Cognitive System or IoT are transforming the financial world.
Some examples of its use would be:
But what risks do these new companies and their technologies entail?
All could not be advantages, as technology advances with innovative systems, new vulnerabilities are discovered.
A priori the Fintech could be less safe than the traditional banks, because they are not so regulated and work with new technologies in development.
In addition, its differentiation is based mainly on a new way of providing financial services, simplifying paperwork and allowing practically 100% of banking operations on a smartphone, which implies a greater impact on your business before attacks based on the interruption of your operations. or information leak.
Main risks to which they are exposed
Information leakage. This can problem can come directly from the internal scope of the company. Employees and former employees are an important gateway to attacks by cybercriminals. This is due to the leak of information or the use of unsafe passwords.
SQL injection attacks. They occur when an attacker sends or “injects” SQL statements maliciously into SQL code for the manipulation of databases.
Cloning of the fingerprint or voice: Biometrics, unlike passwords, is not secret. You can trick the voice recognition software through recordings of the owner’s voice or recognition of the fingerprint through the copy of the footprint with candle wax or glue.
Attacks DDoS: they block the operation of the operations with massive increases in traffic to the platforms.
Fintech and cybersecurity: there is no one without the other
While we assume that cyber attacks are among one of the most important risks for Fintech companies, that is where they can mark their added value.
The Finteches are expected to turn these security challenges into new opportunities, paying special attention to security methodologies.
In 2018 two new regulations materialized in Europe: EU Payment Systems Directive (PSD2) and GDPR. In addition, the European Commission launched Fintech Action Plan in March, based on three fundamental pillars.
According to a PwC study, based on the impressions of 9500 entrepreneurs around the world, 40% believe that the interruption of operations is the biggest threat to their organizations.
The study revealed that DDOS attacks, consisting of blocking the operation of operations with massive increases in traffic to the platforms, increased significantly in 2018, with Spain being the third most attacked country, only behind the United States and the United Kingdom.
The Fintech offer the opportunity to democratize the market allowing access to a greater number of financial services through convenient applications. For such transformation to be feasible, fintech solutions require environments that are secure.
Assuming that no industry can be developed to the detriment of security and that it is precisely on this that the change in society must be supported, cybersecurity at Fintech should be understood as another source of innovation, that far from stopping its growth becomes its driving force.
Marina Córdoba Poveda | Marketing Digital Assistant en R3 CyberSecurity
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