The rising importance of cyber security within FinTech.
Cybersecurity is fast becoming the most business-critical investment an enterprise can make.
In rapidly innovating sectors such as FinTech and cryptocurrency, the efficacy of cybersecurity infrastructure and the requirements of financial institutions and providers to guarantee constant network and asset protection is a high priority, especially when “blockchain projects around Web3.0 lost more than $2 billion to hacks and exploits” in the first 6 months of this year.
The cybersecurity sector has had its fair share of challenges over the last few years as crypto becomes all-dominant, cross-border payments become more streamlined, and the ongoing war in Ukraine emboldens hackers.
So how are FinTech companies responding?
The human impact on cybersecurity breaches, and why hiring the right cybersecurity experts is so important.
Cybersecurity specialists have for years intimated that human error is, by and large, the most contributory factor to data and financial breaches, and while hiring cyber security specialists is a priority, training and preparing entire workforces against new forms of network breach is equally as important.
Most of this comes down to a behaviourally loose security culture. As this piece in Fintech Futures shows:
- “One-third of finance industry workers store their work passwords in a personal journal.
- 52% of finance workers say security policies restrict the way they work and 49% admit to finding ways to work around security policies.
- 46% of finance workers surveyed in the report said they allow their family members to use their work devices for personal usage”.
However, as the piece goes on to report, FinTech talent understands the importance of cybersecurity better than most:
- “Fintech workers were found to be the most cyber aware of all the industries”.
When “cyberattacks cost the global economy a staggering $6 trillion”, shoring up gaps in security behaviours – especially in regards to password usage – is essential.
How are security providers integrating new tech to help bolster cyber defences within FinTech?
EuReCA, Project Ellipse, Biometrics and the rise of SupTech.
SupTech, or supervisory technology, is the front line of FinTech cybersecurity defence, defined by the BIS as “technology for regulatory, supervisory and oversight purposes”.
This is an important shift in cybersecurity culture and approach because the focus is on risk management, compliance and the regulatory impact of security solutions, as much as the shoring up of gaps in network usage.
Some of the most important SupTech innovations have been at macro-governmental level, which indicates a more global approach to FinTech cybersecurity, including:
- EuReCA – “the EU’s central database for anti-money laundering (AML) and counter financing of terrorism (CFT)…(providing) the EBA and the Competent Authorities of all EU nations holistic information to monitor financial institutions… assess risks and potential impacts, and identify early warnings of emerging..risks”.
Project Ellipse – “advanced analytics, machine learning, and natural language processing on a combined dataset of regulatory reports, news, and media information to assess emerging risks and generate insights for intelligent supervisory decisions”.
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The Future of Cybersecurity.
Oversight of the FinTech sector, especially in the nebulous and fast-growing crypto sector, is almost inevitable considering the scale of FinTech hacks and breaches. However, responses to the rise of crypto indicate how the wider FinTech sector will respond to future novel security issues.
Some companies and governments rely on a softer touch – for example, the emergence of RegTech – “technology to enhance regulatory and compliance processes” as a power player in the security world will play an increasingly important role in FinTech security and risk management.
However, some countries and governments are outright banning crypto exchanges and crypto mining. While this will go some way to removing security issues, it merely drives malfeasance underground, and the long-term effects of a blanket ban have yet to be truly felt.
FinTech companies are turning to mergers to shore up security, as the network and FinTech environment becomes riskier.
The bottom line.
No network, business, industry or sector comes without risk.
But for emerging markets such as FinTech, security is more than brand or asset protection: challenger banks, exchanges, online payment services, the entire infrastructure of banking, all of it relies on total fiduciary assurance – without which the global economy suffers, VC investment bottoms out, and most importantly the global financial customer loses trust in FinTech companies.
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While the talent market has undoubtedly become more competitive for both recruiters and HR professionals, we remain dedicated to connecting our partners with the right tech or IT talent.
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Brett Lockett is an Associate Director – Infrastructure, Cloud, Cyber Security & GRC at Datasearch Consulting, a leading executive recruitment firm specialising in the Cyber & Cloud Technology sectors.
You can download their FREE comprehensive guide on “The Complete Guide to Hiring Fintech & Data Talent – 5 Proven Steps to Secure the Best Candidates Possible” here. Alternatively you can view the Datasearch Consulting website or contact them directly on firstname.lastname@example.org for a more detailed discussion
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