Fintech is a prime target for cyber attacks - malware attacks 40% of finance companies worldwide, and in successful cyber attacks, malware is the cause 73% of the time. And in terms of frequency, finance organizations each suffered over 50 attacks annually - that's more than any other industry.
So, in case you didn't already know it and those statistics weren't enough, read on for all the critical cyber risks every fintech company should watch out for.
Digital Footprint
A digital footprint is specific data left behind after most online activity. In the case of fintech companies, for example, the footprint of this company includes relationships with customers, financial operations, presence on social networks, and operations in the cloud. Utilizing data removal tools to minimize that digital footprint and keep your privacy intact is essential.
A company's increased cyberspace activities create multiple entry points for possible cyberattacks. A hacker can try to gain access using the information from the digital footprint - like consumer addresses, emails, etc - to start an attack.
Data Breaches and Insider Threats
The biggest challenge is safeguarding data and consumer finance details - Americans lost $43 billion to identity fraud in 2023. And looking at the IBM 2023 Cost of Data Breach report, the average loss per data breach amounts to $5.85 million. Another study found that 3/4 of fintech services had at least one data breach in the last five years. Those are numbers you can't ignore. Causes of data breaches can be anything from weak software to weak account passwords - it isn't always the fintech company at fault.
Internal threats are also massive. Employees or contractors with sensitive data can deliberately or accidentally leak that information. One study revealed human error is the cause of 52% of data breaches. And according to the 2022 Cybersecurity Insiders Insider Threat Report, 60% of organizations have reported insider attacks within the year. Proper employee training and monitoring is essential.
Ransomware Attacks
In 2023, the cost of ransomware attacks reached an all-time high of $1 Billion with a reported 317.59 million ransomware attempts.
Ransomware attacks are so sophisticated. Hackers use malicious code to access servers and accounts, block them, and demand money to release them.
For the fintech companies, ransomware attacks can be massive. There's so much money and potentially sensitive data to take that ransomware attackers know they can set a high demand price, and these companies will pay, hence why it's costing billions. The worst is that there's not much companies can do about it. Once the account is hacked and locked, the only way to release it is with a payment, and even then, they still have all the sensitive information and will likely sell that to other parties to make even more money.
Ransomware attacks usually come through suspicious emails, links, or software. Phishing emails are one of the things you should be looking out for and again, employee training is essential.
Other Malware Attacks
There are other kinds of malware attacks to watch out for - ransomware is the most common, but there are other avenues. However it happens, it always includes malicious code that breaches and shuts down computer systems, capturing sensitive information.
One study found that for every 13 web requests, 1 contains malware. And when you consider the sensitive nature of information fintech companies store on their servers, they are a high-risk concern. Again, employees can be the accidental internal human error here, clicking on emails or links they shouldn't.
Malware comes in many varieties, like viruses, worms, spyware, adware, and Trojan horses, and each of them uses different strategies and techniques.
Any fintech company has lots to watch out for - they're the most targeted industry. The amount of sensitive information these companies store and the financial reward is too much to pass for hackers. And the issue is, the methods they're using are only becoming more sophisticated. Fintech companies need to have strong defenses and attack response protocols in place to limit the damage of an attack.
