What cybersecurity trends can we expect to see in FinTech as 2021 draws to a close and we get ready for 2022?
2020 and 2021 have been tough years for the FinTech industry, but despite the economic fallout from BREXIT and the COVID pandemic, the sector is none the less forecasting a strong and optimistic outlook for 2022 and beyond. It is widely considered that FinTech is now the backbone of the finance sector, with its forward-thinking approach to product innovation, and ability to quickly adapt to changes in the market.
Several C-suite FinTech leaders that were recently polled, believe that with increasing competition we will likely see a spike in mergers and acquisitions over the next 12 months. This will be driven by the increasing pressure on profitability, maintaining cash flow, building funds and innovation. Consolidation could be one area that sees growth, forcing providers to re-bundle a multitude of services, to provide better value to consumers.
This however does bring its own issues, as organizations are being encouraged to look at different ways to offer proven specialized solutions, in a more agile and secure fashion. It is believed that providers will be encouraged to continue to offer robust, specialized solutions, that will be sustainable over the long term. For instance, we could see greater focus on the trusted methods such as digital payments through open banking, which saw a seen huge boost in 2020 and 2021. This was largely driven by the changes in the market caused by the effects of COVID and BREXIT, but also due to the increasing confidence in the market.
This trend has meant that for FinTech providers to survive they have had to look for ways to maintain a “Business as Usual” approach during these new and challenging market conditions. With the majority of companies being forced to move their workforce to a remote or “work from home” scenario this has put a strain on both communication and data transfer.
With privacy and security being paramount in the financial sector, FinTech providers have started looking at new ways to communicate both internally and externally. Having a solid backbone of a reliable infrastructure, fast network and secure unified communications will ensure the continued survival of the sector. With the added pressures of a massive hike in cyberattacks during 2020 and 2021, being able to safeguard sensitive financial information with robust security measures will be a key focus.
6 FinTech Cybersecurity Trends for 2022
Here are some of the main cybersecurity trends that we can we expect to see in FinTech during in 2022:
- Increased Efficiency – Through increasing use of more innovative and new technology which is now coming downstream.
- Speed of information – There will be an increased pressure to be the first to market, to have the edge over the competition. This factor will also begin to define who the leaders are in this sector as well as how they can do this safely and securely.
- Refreshing and Updating of Existing Systems – AI and machine learning will become increasingly important to FinTech in order to adapt to the way the market now looks. Pioneers will begin to take the lead, and some are already starting to immerge, so the rest will need to follow or get left behind. Investment in new technology will be a crucial factor in maintaining market share over the coming year.
- Security of Mission Critical Applications – Many proprietary systems have inherent flaws and vulnerabilities which has led to an increase in the number of breaches in 2020 and 2021. As hacking becomes more ingenious, and with a predicted increase in more cyber-attacks during 2022, there will likely be an even greater surge in threats targeted at the fintech sector during 2022. Improving the protection, reliability, and robustness of basic infrastructure will be crucial to maintain consumer confidence. In the recent past, some institutions were so badly hit by cyber-attacks that they have had to completely refresh vital, mission critical systems, core to their business. Adding to the problem is ‘insider threats’ perpetrated by both negligent and malicious insiders have increasingly becoming a major source of breaches, especially as collaboration tool usage has exploded with the pandemic and remote work. Further breaches could shatter consumer confidence, reputation and bottom line, so it’s a critical area that FinTech companies must continue to address in 2022.
- Improved Communication – With a massive increase in the demand from consumers to talk to customer services, it has led to a huge burden being placed on all customer service functions. Organizations are now experiencing much greater pressure in this area of their business. In some cases, this has led to a complete overload, resulting in poor quality to the consumer, with customer service systems unable to cope. The fintech sector will now start looking at different ways to meet this demand to offer more satisfactory methods of customer communication.
- Collaboration that Supports a Flexible Business Model – Requests for data separation have become extremely common as business and its associated communications web become more global. ‘Information barriers’, are becoming an essential element to prevent the collaboration of material which may lead to conflict of interests or competitive advantage beyond just trading groups. They are also an essential part of privacy regulations such as GDPR for multinational organizations. While constructing these Information Barriers may seem easy enough to do, in reality they often completely cut off all communications between these groups regardless of the scenario – hindering other work practices. FinTech organization will look to solutions that allow them to implementing dynamic information barriers that leverage attribute-based access controls (ABAC) to create flexible vs finite information barriers that stop all non-compliant communication collaboration.
FinTech information security teams, and all organizations in general, have a lot to think about and prepare for to be cyber ready for 2022. Addressing these issues will require adequate preparation and agility, as well as the adoption of modern methodologies and technologies built for the task at hand.