With 98% of startups vulnerable to cyberattacks, the fintech sector must get serious about the growing cybersecurity threat.
Fortunately for consumers, financial technology (fintech) has created a world where money, banking, trading, lending, and fundraising are conveniently available on a mobile application. This new reality of public access to the economy seems utopian, but as with most 21st century technological developments, it comes at a price. The threat of cybersecurity.
So what is fintech? Fintech is a new technology that seeks to automate financial services. Fintech products are usually delivered via a mobile application. This can include apps for banking, peer-to-peer lending, peer-to-peer payments, investing, stocks and commodities trading, mortgage products and fundraising.
Thousands of fintech companies have rushed into the market to offer financial services to the 3.1 billion smartphone users around the world. In their race to bring new products to the market, cybersecurity has all too often fallen by the wayside. This occurs when technological developments outpace the security capabilities necessary to protect IT networks and consumer data. These IT security gaps have resulted in a number of challenges.
Cybercriminals are constantly searching for gaps and weaknesses in IT security systems. Fintech businesses such as the emerging neobank sector are at risk of significant financial loss. A neobank is a type of direct bank that is 100% digital and reaches customers on mobile applications and personal computer platforms. Neobanks do not operate traditional physical branch networks but are still subject to federal and state banking licensing and regulations.
An increasing number of neobanks are releasing mobile apps and delivering greater access and convenience for mobile consumers. There are 45 Neobanks in the U.S. alone. However, the proliferation of mobile neobanking brings with it an increased security threat. Neobanking apps must be designed with security in mind in order for developers to avoid serious cybersecurity flaws.
Cybercriminals are constantly searching for vulnerabilities in companies across the world in order to launch a cyberattack. One common method of attack is phishing. It is common for attackers to take advantage of users’ weak passwords. A neobank app or network may have inadequate data storage security. Any cybersecurity vulnerability leaves customers and the neobanks they do business with open to attack.
How fintech can better protect itself
One of the biggest issues that fintech faces is a lack of established IT and data security protocols, which leaves consumer data exposed and vulnerable to attack. Robust IT and data security protocols should be established upfront, before the back-end and front-end app development gets underway. Cybersecurity protocols are a critical pillar on which any successful fintech business must be established.
Compliance is another foundational pillar for fintech. Rapidly growing companies might forget to consider the vast array of compliance regulations related to IT and data security. Financial regulators have strict requirements regarding cybersecurity and consumer data protection.. Compliance programs need to be established in parallel to the development of the application and implemented well in advance of commercial launch.
At Coro Global Inc., cybersecurity is our n.1 priority. We are serious about IT and data security. Our Coro mobile payment technology and DLT network have been developed on a solid foundation of cybersecurity and regulatory compliance. Our IT infrastructure, network security, and compliance protocols were established during the design and architecture of our Coro mobile payment app. As evidence of this commitment, Coro is among the very first fintech companies to obtain SOC 2 Type I Certification, prior to product and network launch. SOC 2 is the most coveted and hardest to obtain IT security certification.