In this era of digitisation, no organization is completely protected from cyberattacks. Every day, more than 30,000 websites are hacked around the world, with the majority of these attacks targeting small and medium-sized businesses. In spite of the fact that 51% of SMEs do not use cyber security measures, believing they are too small to be hacked, the typical ransom paid by mid-size organizations in 2021 was an astounding $170,404.
To safeguard data, avert financial penalties, engender customer trust, and construct a security culture, compliance with cybersecurity protocols is essential.
Financial technology (fintech) is booming, and with it comes a growing need to comply with cybersecurity regulations. A robust cybersecurity compliance program is becoming more and more necessary as the digitization of financial services continues to drive innovation and growth.
Financial services must maintain compliance with regulations and ensure their data and systems are secure to keep up with the rapid changes in technology. To stay competitive, protect their customers, and comply with laws and regulations, fintech companies will need to pay even closer attention to their cybersecurity compliance obligations.
We will take a comprehensive look at the growing importance of cybersecurity in the fintech industry in 2023 and beyond in this article.
What are Cybersecurity Compliance Requirements?
The cybersecurity landscape is constantly changing and evolving, and as a result, compliance requirements are also constantly changing and evolving. This makes it all the more important for institutions to regularly evaluate their cybersecurity and compliance measures to ensure that they are up to date with the latest regulations and guidelines.
Cybersecurity compliance requirements include maintaining the confidentiality, integrity, and availability of information and data, performing penetration and vulnerability testing of systems, regular risk assessments of systems, and hiring trained and certified cybersecurity staff, among other things.
Compliance requirements vary depending on the type of organization, sector, and industry that you are operating in. There are many different types of regulations and compliance standards that financial services firms need to be aware of and meet in order to stay compliant with the law and protect their customers’ data and information. Some of the most important and relevant are outlined below.
The Growing Importance of Cybersecurity Compliance in the Fintech Industry
Since financial transactions involve sensitive personal and financial information, such as credit card numbers and bank account details, cybersecurity is essential in the fintech industry. If such details are stolen, it can cause financial losses for both individuals and the company, as well as damage the company’s reputation.
In addition, fintech companies often handle large amounts of money and can be a target for sophisticated cyberattacks, such as fraud and hacking, which can have serious consequences for the economy. Therefore, it is crucial for businesses in the fintech industry to have strong cybersecurity measures in place to protect against these threats while ensuring the safety and security of customers’ information.
Cybersecurity Compliance Regulations for Fintech Companies
There are many different types of regulations and compliance standards that financial services firms need to be aware of and meet in order to stay compliant with the law and protect their customers’ data and information. Some of the most important and relevant are outlined below. ISO/IEC 27001: Information Security Management Standards (ISMS) are the international standards for information security management. They are applicable to any organization that manages information assets.
The standard provides a framework for implementing an information security management system (ISMS) based on the principle of “it’s better to be safe than sorry.” It helps organizations to identify risks related to the confidentiality, integrity, and availability of their information assets. ISO/IEC 27001:2013 is the most current version of the ISO/IEC 27001 standard.
Major SaaS companies ensure compliance with data security standards such as SOC2, ISO 27001, and PCI-DSS by using automation. They also work to protect their intellectual property by implementing systematic risk management strategies.
Tips for Meeting Cybersecurity Compliance Obligations
When it comes to meeting cybersecurity compliance obligations and keeping up with the latest cybersecurity regulations, it’s important to have a good strategy in place. In order to meet the growing challenges posed by cybersecurity, firms in the fintech industry need to put in place robust and comprehensive cybersecurity measures.
In order to stay competitive, protect their customers, and remain compliant with laws and regulations, firms in the fintech industry need to pay even closer attention to their cybersecurity compliance obligations in order to meet the growing cybersecurity challenges of the future.
Some important tips to keep in mind when it comes to meeting cybersecurity compliance obligations include performing regular risk assessments of systems, hiring trained and certified cybersecurity staff, and ensuring the confidentiality, integrity, and availability of information and data. Firms in the fintech industry should also be aware of the various regulations and compliance standards outlined above.
Benefits of Cybersecurity Compliance for Businesses in the Fintech Industry
- Ensures secure digital storage of confidential customer data — Companies should ensure that confidential customer data is stored securely on digital platforms to protect their privacy. Access to the organization’s current software framework or cloud-based services should be restricted to authorized administrators. Combining data management capabilities with cybersecurity solutions can thwart unapproved access, viruses, and data breaches while preserving confidentiality and consistency in the industry.
- Increasing the efficiency of operations — Organizations can use security technologies to handle an abundance of data, detect privacy concerns, identify unused resources, implement new tools to enhance operational performance, and limit excessive data consumption by eliminating unwanted noise and focusing on the essentials. The investment in cybersecurity initiatives strengthens the entire organization’s structure and aids in combating potential weaknesses that may be exploited by malicious parties.
- Reduces the risk of penalties — Failure to adhere to security protocols may result in significant financial losses for companies. Most regulatory bodies impose costly penalties on businesses that do not comply with stringent corporate governance and consumer protection regulations.
- Boosts a company’s security culture — According to a Verizon report from 2022, most data breaches are caused by human error. Cloud assets are the primary targets of malicious activity, with passwords and credentials being the most sought-after items. In order to combat this, it is imperative to cultivate a culture of security across departments and workflow management systems in order to ensure that employees are aware of how to protect themselves and their data online. Protecting confidential information requires organizations to establish a solid security framework and train employees on how to detect and stop security breaches.
- Enhances brand reputation by establishing consumer trust — A company’s reputation can be adversely affected by poor cybersecurity practices, with 78% of consumers ceasing to engage digitally with affected brands, while 36% withdrawing completely. Businesses must invest in strong security governance and ensure confidentiality in order to build customer trust and foster a positive image. This will demonstrate that the organization is reliable and worthy of the public’s trust.
What’s Next for Fintech Cybersecurity?
As the digitization of financial services continues to drive innovation and growth, the need for robust cybersecurity compliance measures is also becoming more and more important. In order to keep up with the rapid changes in technology, firms in the fintech industry will need to pay even closer attention to their cybersecurity compliance obligations in order to remain competitive, protect their customers, and remain compliant with laws and regulations.
Cybersecurity is an important topic for the fintech industry, and the importance of cybersecurity compliance will only continue to grow as technology continues to evolve.