Third-party vendors create identity and access control challenges for Fintech apps
As with all other sectors that have embraced digital transformation, cybercrime has become a more prominent threat in finance. According to VMware’s Modern Bank Heists study, since the COVID-19 pandemic there have been 238% more cyberattacks on companies in the financial sector, a shocking increase.
The latest string of attacks on DeFi platforms clearly shows how fintech companies tend to be a big prize for bad actors. Fintech apps in particular tend to offer the potential for massive payouts. Attackers can also cause more damage by targeting users of the technology, who may implement less stringent cybersecurity measures. One malicious app can strip fintech users of their assets and leave the fintech company with a tarnished reputation.
Fintech companies need to rethink how they approach their identity and access control strategy to ensure their platforms are equally trusted by consumers and businesses alike. As this industry continues to adapt to the cloud, it’s important that the right controls are put in place to maintain an organization’s security posture—and this comes with its own challenges.
Why Fintech applications are hard to secure
Cloud development has made new types of apps possible and existing apps work better than ever. However, it has also generated new opportunities for misconfigurations, human error, and identity management issues, and it has rapidly expanded potential attack surfaces. Because fintech apps leverage a huge range of technologies, this continues to be one of the most challenging areas when it comes to security.
Whether you’re moving a legacy app to a new and better cloud-based architecture or expanding existing capabilities, any type of change leaves an organization vulnerable at cloud scale. This can make the blast radius of a single attack much larger, as an infrastructure’s attack surface is now extended and dynamic in the cloud.
Fintech applications must also meet strict regulatory standards that vary around the world, often incurring heavy fines for non-compliance. For example, in 2019, the Spanish Data Protection Authority fined a financial service provider 1 million euros due to an insufficient legal basis for data processing, which violated the General Data Protection Regulation (GDPR). Operating in the financial realm means providing a higher level of accountability to customers and across the industry, which can be difficult. Fintech requires organizations to ensure visibility, reliability and proper configuration.
To stay competitive in this highly crowded arena, fintech companies must maintain a firm grasp on security and privacy from day one of development, especially as third-party services continue to grow.
How third-party services can increase security challenges
As fintech organizations become more dependent on suppliers and other partners such as manufacturers, suppliers and subcontractors, as well as increasingly complex supply chains, they also become more vulnerable to attackers. Respondents to CRA Business Intelligence’s recent third-party risk survey believe that third parties are increasingly the cause of IT security incidents, with more than half of all respondents (57%) reporting that they were victims of an IT security incident – either an attack or a breach – related to a third party partner in the last 24 months.
Organizations often lack visibility into third parties and third party partners, and thus the vast amount of data available to them. In today’s software-centric world, interoperability is essential, but it often leaves organizations even more vulnerable to attackers. Fintech developers must be constantly alert to potential software supply chain issues and the security challenges third-party services may present to their organizations.
Remains compliant among strict regulatory standards
In direct response to recent high-profile cases of cryptocurrency fraud, regulators are beginning to pay even more attention to the already highly regulated area, creating a challenge for fintech applications and companies to stay on top of these changes and remain compliant and protective. of their sensitive information. According to Gartner’s Fintech in 2022 Report, fintech leaders ranked regulatory challenges as the biggest threat to their business right now.
Amid these changing regulations and requirements that vary around the world, including Payment Card Industry Data Security Standards (PCI-DSS), Anti-Money Laundering (AML)/ Know Your Customer (KYC) and the newly established California Privacy Rights Act (CPRA ) regulations, companies are being pressured to step up their data protection and privacy standards. So how can businesses stay compliant?
Every business needs to know who has access to the data and applications, where they are and what they are doing with them. As threats continue to grow exponentially in fintech, implementing identity and access management (IAM) tools will be essential.
It is important for a business to have the right technology and processes in place to not only ensure they remain compliant with industry regulations, but also provide consistent protection for their sensitive data, especially in the cloud. IAM tools, for example, provide organizations with security that won’t slow down development or add more work to their teams.
Unfortunately, the security threats from financially motivated cybercriminals will only become increasingly sophisticated. The fintech industry faces a lot of pressure to protect sensitive customer data and must be prepared for cyber threats by establishing a proactive security posture and robust identity and access management strategy that can handle the complexity and scale of today’s cloud security challenges.
