The Growing Challenge for Cybersecurity in an Increasingly Digital Finance World

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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

The rapid push to democratize finance through fintech solutions brings increased accessibility — and that comes with the increased threat of data breaches, fraud, identity theft and other cybersecurity risks. About $6 trillion is lost globally each year to cybercrime. As finance becomes more digital, financial institutions need to give equal effort to building up a robust cybersecurity infrastructure to keep customers and their assets safe. 

Here are some of the key challenges institutions face when developing cybersecurity strategies:

Cross-Compatibility and Integration Across Ecosystems

A customer might have one app for banking, one for investing, and another for contactless payments. To improve user experience and make your fintech more convenient, integrations with other apps and platforms are key for allowing customers to build their own financial ecosystem.

However, this presents major challenges from a cybersecurity perspective. As sensitive financial data passes between systems in this ecosystem, the exposure to data breaches and other threats increases. 

In order to protect consumers, financial institutions will need to work together to develop cybersecurity frameworks that protect data across entire ecosystems, not just inside a single platform.

Lack of Industry Wide Standards

A key barrier that makes developing an ecosystem wide cybersecurity framework is the lack of industry standards. While every bank and fintech company has its own standards and approaches to cybersecurity, the digitization of finance is so new that uniform standards have yet to crystallize.

Differences among institutions, local regulatory requirements and industry associations make developing consistent cybersecurity standards a challenge. This becomes even more difficult for institutions that serve an international customer base. Fortunately, the need for uniform standards of privacy and data protection is well-recognized, and recommended international standards like NIST and ISO have been developed to help companies collaborate more easily on cybersecurity frameworks.

Training Staff in Cybersecurity

As more services and products go digital, cybersecurity is becoming a major priority for departments inside organizations. It’s not enough to have one IT department that handles all of your cybersecurity needs. Staff in other areas of the business need to become cybersecurity champions as well so they understand how to anticipate and prevent potential threats. 

To keep up with the threats posed by an increasingly digital financial world, institutions need to implement company wide cybersecurity training that ensures every employee has the skill and insight to keep customer data safe.

The ability to make more financial services accessible to more people is one of the greatest contributions fintech has made to the finance world. More people are now empowered to take control of their financial life using these new digital tools. However, addressing these cybersecurity challenges will be key to ensuring that this increased accessibility doesn’t come at the cost of increased vulnerability.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.