The fintech industry recognises the power of data and how it can be utilised to increase customer loyalty, revenue and brand value.
In order to launch new solutions that provide consumers ease of access to personal financial data, mobile banking, and investment opportunities in non-traditional situations, these companies need to understand its customer’s interaction, spending habits, and even insight into their bank balance.
Growing data protection risks
Fintech businesses are collecting and analysing an increasing amount of data about consumers, but this growth does not come without risks. A recent report from EY outlines that consumers still have concerns regarding their data security and privacy, with four in ten households stating that they don’t believe their personal data will ever be fully secure. Therefore, these businesses need to ensure that it has the right capabilities and systems in place to meet the fintech demands and tackle the growing number of data protection challenges:
As customer data becomes increasingly more valuable, fintech businesses remain vulnerable to hacking attempts and potential network exploits. Everyone involved in the fintech industry recognises that the negative publicity associated with a network breach doesn’t help retain customers or acquire new ones. Customers now look for due diligence from fintech providers, expecting them to secure their money and private information, which can often be exploited for additional financial gain.
When it comes to data protection and security, it’s no secret that the human aspect of any fintech business is its weakest link. From bad password sharing practices to falling victim to phishing emails, these challenges are any CISO’s nightmare. Fintech businesses need to improve its employee’s cybersecurity awareness, by establishing effective training programmes and data security protocols.
Compliance and data security
Fintech businesses need to ensure that it has the right capabilities in place to adhere with new regulations around customer data protection and security. The newly introduced PSD2 and GDPR regulations demand stricter guidelines around data, with high potential costs for getting it wrong. These regulations will only get tougher, and it’s important for fintech companies to stay ahead of the curve and anticipate changes in these regulations.
High costs of data breaches
The cost of a data breach has risen by 12% over the past 5 years and now costs $3.92 million on average. The direct costs of lost or stolen customer data and regulatory fines aren’t the only financial implications of a data breach. Fintech businesses could also face diminished brand reputation, legal fees and incident response costs, which all contribute to data breach expenses.
Multi-layered security network defenses
When it comes to protecting customers data, fintech business should consider a multi-layered security approach. This approach means deploying many different levels of security to protect data and intellectual property, working across different technologies and applications. By working together, these security layers provide a better chance to prevent hackers gaining access to the network than just a single security solution. This may include, internet protection, email and file security or virus and malware protection.
To build the most effective defenses, fintech businesses also need to consider how it leverages people and processes. With this in mind, it should also look to improve its detection capabilities so that it can respond promptly to suspicious or improper events with the correct protocols. It is also imperative that businesses improve its employee’s cybersecurity awareness and conduct regular training sessions throughout the year to keep employees aware of the potential damages. Training programmes will create a strong culture of cybersecurity that can go a long way toward minimising data privacy threats.
About the author
Alan Hayward is Sales and Marketing Manager at SEH Technology UK and has been with the company for 19 years. In this role, Alan’s responsibilities include overseeing all sales and marketing activity in the UK, as well as collaborating with clients including resellers and distributors. Prior to joining SEH Technology, Alan was a Product Manager at Hosiden.
About SEH Technology
SEH Technology is a manufacturer of high quality network solutions specialising in network printing and using USB devices via a network. With over 30 years of experience, it has an innovative and versatile portfolio of products and customer tailored solutions for all types of businesses. SEH develop and manufacture all products at its headquarters in Germany, with worldwide distribution via its US and UK subsidiaries and an extensive network of partners, distributors, and resellers.