Top 10 Fintech Cybersecurity Trends

Let’s Look Into Some Numbers

According to IBM’s annual Cost of a Data Breach Report, intrusions are now more costly and have a greater impact than ever. The average cost of a data breach across all industries is $4.3 million, representing a 13% increase in the past two years. The healthcare industry has experienced the highest average cost over the past 12 years, with each breach costing slightly more than $10 million.

According to Fortune Business Insights, the global cyber security market is expected to expand from $155.83 billion in 2022 to $376.32 billion in 2029, primarily due to the emergence of e-commerce platforms and the emergence of technologies such as IoT, artificial intelligence, and cloud security.

Read: 10 AI ML Applications in the Identification and Prevention of Different Types of Fraud

Introduction

In the present day, no individual is immune to the peril of an attacker. Each organization must be adequately prepared. To safeguard themselves, organizations of all sizes must comprehend the constantly changing cybersecurity environment. It is crucial to note that the consequences of cyberattacks are not restricted to the digital realm. The physical world is increasingly being affected by digital attacks.

Businesses are gaining numerous benefits as a result of the proliferation of technologies. However, this proliferation of technologies is also resulting in an increase in the number of cyber hazards through a variety of processes. Cyber threats can have significant consequences for organizations of all sizes, such as financial and reputational harm. The severity of the assaults can influence the extent of this impact.

Read: Top 10 Neobank Companies of the Fintech World

What are Cybersecurity Threats?

The primary goal of cybersecurity threats is to pilfer data, cause damage, or interfere with computer systems. These threats are conducted by hackers or attackers who have malicious intent. Malware, injection attacks, social engineering, configuration errors, and so forth comprise the primary categories of cyber threats. Cybersecurity can be derived from a variety of sources, including antagonistic nation-states, individual hackers, and contractors who abuse their privileges to commit harmful acts.

Fintech Guest Insights

Justin Kestelyn, Head of Product Marketing and Hacker Community Marketing, Bugcrowd

“Hackers Are Our Best Defenders

This year, Cybersecurity Awareness Month is incredibly relevant for consumers and workers who need to be vigilant about the constant barrage of phishing and data breach risk.

The global hacker community can in fact be a massive net positive for those consumers and workers, and for the security teams tasked with protecting them. For example, the existence of a chronic talent shortage in the cybersecurity industry has been well documented for years. But that shortage calls the definition of the “talent pool” into question, because the reality is that the hacker community is an endlessly elastic source of capacity and skills for augmenting and extending security teams on demand — if you know how to engage in a mutually trusted, productive, and scalable way.

Security leaders who can do that will have access to a “crowd cloud” for meeting almost any security testing requirement, with the results going beyond what automated tools can achieve and with all the utilization benefits of an os-a-service model. That’s a fact deserving more awareness in the security industry!”

Lookback at 2023 Trends

1. Ransomware attacks will escalate and become increasingly sophisticated. This axiom persists, but with a new twist: extortionware, a novel form of attack, is the most significant trend in ransomware.
2. The subsequent assault vector is machine learning. There are an increasing number of instances of data exfiltration, which has the potential to contaminate your machine-learning datasets.
3. The localization of cybersecurity is a result of deglobalization pressures. Additionally, there is an increase in the number of local laws, particularly those that pertain to data privacy. This local impact will be examined in the subsequent trend.
4. It remains an advantageous moment to pursue employment in the cybersecurity sector. This is because we require a greater number of security professionals than we currently have.
5. Omnichannel attacks are experiencing an increase in frequency. This has never been more accurate! The proliferation of communication channels, including social media, messaging, phone calls, video, and SMS, results in an increased number of surfaces that are susceptible to attack.
6. The responsibilities of the CISO are broadened. It is accurate that as the risks associated with security increase, so does the level of attention in the boardroom. In reality, nearly half of CISOs are now directly reporting to their CEO.
7. Requirements for cyber insurance will escalate. You are likely paying significantly more for cyber insurance today than you did just a year or two ago, even though estimates vary.
8. Zero-trust is the standard. Certainly, the optimal standard remains zero-trust, even though numerous organizations continue to encounter difficulties in achieving it.

Read: Top 5 Strategies for Cloud Security Regulations in Financial Services by Sysdig

The Ten Most Influential Fintech Cybersecurity Trends

1. Cybersecurity Risks Associated with Remote Employment

The COVID-19 pandemic necessitated that the majority of organizations transition their workforces to remote work, frequently at an accelerated pace. Numerous surveys indicate that a substantial portion of the workforce will persist in working remotely in the aftermath of the pandemic.

A trend that has acquired significant momentum, the expansion of remote work, continues to influence the professional landscape in 2024. This change requires a more intense emphasis on cybersecurity, particularly in the area of securing remote access to work environments. Splashtop is a critical participant in this scenario, providing advanced remote access solutions that are tailored to the security requirements of this evolving work model.

The following are examples of threats:

• Spyware that is specifically engineered to monitor encrypted messaging applications.
• Criminals are exploiting critical security vulnerabilities in Android devices.
• Mobile malware encompasses a wide range of potential application scenarios, including data thievery, SMS spam, and Distributed Denial of Service (DDoS) attacks.
• The field of mobile cybersecurity encompasses a wide range of topics, including network security, back-end/cloud security, and the increasing number of connected objects (i.e., the Internet of Things), including automotive devices and wearables. The protection of applications in insecure environments is not achieved through a single method; rather, it is achieved by implementing supplementary security measures to enhance the overall level of security. To fortify the storage of sensitive data, security professionals are integrating hardware-based security solutions with mobile software security

2. The Evolution of the Internet of Things (IoT)

The proliferation of the Internet of Things (IoT) generates additional opportunities for cybercrime. The term “Internet of Things” denotes a network of physical devices that communicate with the Internet and exchange data, in addition to computers, smartphones, and servers. Wearable fitness monitors, smart refrigerators, smartwatches, and voice assistants such as Amazon Echo and Google Home are all examples of IoT devices. It is anticipated that by 2026, there will be 64 billion IoT devices implemented globally. This increase is being facilitated by the trend toward remote employment.

The dynamics and magnitude of the cyber-attack surface, which is sometimes referred to as the number of potential entry points for malicious actors, are altered by the numerous additional devices. The majority of IoT devices possess significantly reduced processing and storage capabilities when contrasted with laptops and smartphones. This can complicate the process of implementing firewalls, antivirus, and other security applications to protect them. Consequently, IoT intrusions are among the cyber-attack trends that are frequently discussed. 

3. The Emergence of Ransomware

Ransomware is not a novel hazard; it has been present for approximately two decades; however, it is expanding. It is estimated that there are currently more than 120 distinct families of ransomware, and hackers have become highly proficient in concealing malicious code. Ransomware is a comparatively straightforward method for hackers to obtain financial rewards, which is partially responsible for its increase in popularity. The Covid-19 pandemic was an additional contributing factor. New targets for ransomware were established as a result of the accelerated digitization of numerous organizations and remote work. As a consequence, both the number of attacks and the magnitude of demands increased.

Extortion assaults typically involve the theft of a company’s data by criminals, who subsequently encrypt it to prevent their access. After that, the organization is subjected to extortion by cybercriminals, who threaten to disclose its confidential information unless a ransom is paid. This cyber threat imposes a substantial burden due to the economic consequences of paying the ransom and the sensitive data that is at risk. In 2020, ransomware contributed to the first reported fatality associated with a cyber-attack, making it a historical event. A hospital in Germany was unable to treat patients as a result of being kept out of its systems in this incident.

A woman who required immediate medical attention was transported to a hospital located 20 miles away; however, she did not survive. Machine learning and more coordinated sharing on the dark web are enabling ransomware perpetrators to become more sophisticated in their phishing exploits. Cryptocurrencies are frequently requested as payment by hackers, as they are notoriously difficult to trace. Shortly, it is reasonable to anticipate an increase in the number of ransomware assaults targeting organizations that are not adequately cybersecure.

4. Cloud Security Concerns and the Proliferation of Cloud Services

Cloud vulnerability remains one of the most significant trends in the cybersecurity industry. Again, the necessity for cloud-based services and infrastructure was significantly increased by the rapid and pervasive adoption of remote working in the wake of the pandemic, which had security implications for organizations. Scalability, efficiency, and cost savings are among the advantages of cloud services. However, they are also a primary target for assailants. Data breaches, unauthorized access, insecure interfaces, and account hijacking are significantly influenced by misconfigured cloud settings. Organizations must implement measures to mitigate cloud threats, as the average expense of a data intrusion is $3.86 million.

In addition to data intrusions, organizations are confronted with network security trends and cloud security challenges, such as:

• Guaranteeing regulatory compliance across jurisdictions
• Providing an adequate level of IT expertise to meet the requirements of cloud computing
• Challenges associated with cloud migration
• Addressing an increased number of potential entry sites for attackers
• Unauthorized remote access, weak passwords, unsecured networks, and the misuse of personal devices are all potential sources of insider threats, some of which are incidental and some of which are intentional

Read :Top 5 Reasons Why Sysdig Is Used by Goldman Sachs

5. The Sophistication of Social Engineering Attacks is Increasing

Social engineering attacks, such as phishing, are not novel threats; however, they have become increasingly concerning in light of the prevalent remote workforce. Attackers target individuals who access their employer’s network from their homes because they are more vulnerable. In addition to conventional phishing attacks on employees, there has been an increase in whaling attacks that are directed at executive organizational leadership.

Thanks to the widespread use of messaging applications like WhatsApp, Slack, Skype, Signal, WeChat, and others, SMS phishing, which is also referred to as “smishing,” is also gaining popularity. To deceive users into downloading malware onto their mobile devices, attackers employ these platforms.

Another variation is voice phishing, which was popularized in 2020 following a Twitter breach. This technique is also known as “vishing.” Hackers who were impersonating IT personnel contacted customer service representatives and deceived them into granting them access to a critical internal tool. Numerous organizations, including financial institutions and substantial corporations, have been targeted by Vishing.

Additionally, SIM hacking occurs, in which fraudsters communicate with the representatives of a specific client’s mobile operator and persuade them that their SIM card has been compromised. This necessitates the transfer of the phone number to an alternative card. The cybercriminal obtains access to the digital contents of the target’s phone if the deception is effective.

Even as organizations enhance their safeguards against spoofing, criminals continue to pursue novel strategies to remain competitive. This encompasses sophisticated phishing kits that customize their approach to victims based on their geographic location.

6. The Field of Data Privacy

The emergence of data privacy as a distinct field is one of the most significant data security trends. Millions of personally identifiable information records (PII) have been exposed as a result of numerous high-profile cyber-attacks. This, in conjunction with the implementation of more stringent data protection regulations on a global scale, including the General Data Protection Regulation (GDPR) of the European Union, indicates that data privacy is becoming a more significant concern.

Fines, negative publicity, and the erosion of consumer trust are all potential consequences for organizations that fail to adhere to regulations and consumer expectations. Almost every aspect of an organization is influenced by data privacy. Consequently, organizations are prioritizing the recruitment of data privacy officers and the implementation of role-based access control, multi-factor authentication, encryption in transit and at rest, network segmentation, and external assessments to identify areas for improvement.

7. Multi-factor Authentication Improving

The gold standard of authentication is multi-factor authentication (MFA). Nevertheless, malicious actors are devising novel methods to circumvent it, particularly through authentication conducted via SMS or phone calls. Consequently, in 2020, Microsoft advised users to discontinue the use of phone-based MFA and instead opt for app-based authenticators and security keys.

SMS has some inherent security features; however, the messages that are transmitted, including those intended for authentication, are not encrypted. This implies that malicious actors can execute automated man-in-the-middle attacks to acquire one-time passcodes in plain text. This creates a vulnerability for activities like online banking, which frequently rely on SMS authentication. Banks and other organizations will increasingly adopt application-based multifactor authentication (MFA) solutions, including Authy and Google Authenticator, to resolve this issue.

8. Continued Rise of Artificial Intelligence (AI)

The overwhelming volume of cyber security threats is too much for humans to manage independently. Consequently, organizations are progressively utilizing AI and machine learning to refine their security infrastructure. There are cost savings associated with this approach: in 2020, organizations that experienced a data breach but had AI technology completely deployed saved an average of $3.58 million.

The development of automated security systems, natural language processing, face detection, and automatic threat detection has been significantly influenced by AI. AI also enables the analysis of vast quantities of risk data at a significantly quicker rate. This is advantageous for both large corporations that manage substantial volumes of data and for small or medium-sized organizations that may have inadequately staffed security teams.

Although AI offers a substantial opportunity for businesses to enhance their threat detection capabilities, criminals are also exploiting the technology to automate their attacks through the use of data poisoning and model-stealing techniques.

9.Advanced Encryption Techniques

Encryption is a fundamental component of cybersecurity, protecting data by converting it into unreadable formats. Advanced encryption techniques provide enhanced security for sensitive financial information.

 In fintech, encryption is crucial for safeguarding transaction data, customer information, and communications. As cyber threats evolve, so too must encryption methods to stay ahead of potential attackers.

• Post-Quantum Encryption: Research into encryption methods resistant to quantum computing threats, ensuring future-proof security.
• Homomorphic Encryption: Allows computations to be performed on encrypted data without decrypting it, enhancing security and privacy in data processing

10.Zero Trust Architecture

Zero Trust Architecture (ZTA) is a cybersecurity model based on the principle of “never trust, always verify.” Unlike traditional security models that assume everything inside an organization’s network is trustworthy, ZTA requires continuous verification of every user and device, regardless of their location.

For fintech companies, where data sensitivity is paramount, Zero Trust helps in mitigating risks from internal and external threats. It enforces strict access controls, ensuring that only authorized individuals can access specific resources.

• Micro-Segmentation: Divides networks into smaller segments to limit the spread of attacks. Each segment requires separate access permissions.
• Identity and Access Management (IAM): Enhanced IAM systems that integrate with Zero Trust models provide granular access controls and real-time monitoring.

Other Trends:

1. Increased Focus on Mobile Cyber Security
2. Multi-Factor Authentication
3. Artificial Intelligence (AI) Integration
4. Cyberespionage
5. Malware Prevention
6. Distributed Denial-of-Service (DDoS) Attacks
7. Cloud Storage Security
8. Firewall as a Service (FWaaS)
9. Extended Detection and Response (XDR)
10. Third-Party Supply Chain Risk Management (SCRM)
11. Secure Access Service Edge (SASE)

Conclusion

The fintech sector is at the forefront of technological innovation, but this progress comes with its own set of cybersecurity challenges. As fintech companies continue to develop and deploy cutting-edge solutions, staying ahead of cyber threats requires adopting and adapting to the latest cybersecurity trends. From enhanced multi-factor authentication and Zero Trust Architecture to the integration of AI and blockchain, these trends are shaping the future of fintech security. Embracing these advancements and maintaining a proactive approach to cybersecurity will be essential for protecting sensitive financial data and ensuring the continued growth and success of the fintech industry.

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