Top ten security concerns related to Digital Payments

It must be noted that the pandemic has opened the door to great opportunities for financial technology companies.Understand that, customer penetration has heightened the digital payment transformation wave and no one wants to be left out of it. 

Nevertheless, these new opportunities come with newer risks especially those that relate to cyber security. According to a report, financial services are known to incur the highest cost of cybercrime among all industries. 

Bear in mind that FinTech companies are expected to be the target of attacks because start-ups in the industry tend to move faster and swiftly innovate once they begin to grow. 

All of these make them viable targets for cybercriminals. FinTechs are known to hold personal and financial data, thus making them a soft target. For those who run FinTech companies, cyber security will need to be your major concern. 

Security Concerns of Digital Payments

As we all know, there are security concerns one must be aware of when it comes to digital payment systems. And, some of the top security concerns that will affect digital payment and financial tech companies include:

1. Malware Attacks

A good example of malate attacks will have to be the diverse SWIFT attacks. SWIFT, Society for Worldwide Interbank Financial Telecommunication is a protocol that most of these embarks and some other monetary institutions depend on. 

Although newer financial techs are shifting from SWIFT to payment protocols based on blockchain, malware attacks are a vital risk. Differing from other forms of attacks, malware can make use of diverse entry points from different sources. 

These sources can be pop-ups, emails, third-party software, malicious websites, and much more. Note that these attacks are dangerous because their transfer rate is high and they can lead to networks crashing. 

However, digital payments can be safe from malware attacks with a feature such as automated real-time malware detection. 

2. Cloud computing security problems

Financial services such as digital wallets, Internet banking services, payment getaways, and others depend on platforms that are based on the cloud. Understand that the benefits one gets from cloud computing are pretty undeniable. 

These benefits range from accessibility, scalability, speed, and so on. But, this also has much data flowing through it and it makes the cloud the ideal smokescreen for attackers. 

Ideally, you select a reliable cloud provider that has an updated and proactive security approach.

3. Cryptocurrency related risks and money laundering 

While crypto has gathered lots of popularity in recent times, they also have built itself as a huge security challenge for financial techs. With the emergence of money being anonymous, crypto can be used in laundering money. 

More so, crypto transfers can practically be scams that hackers can use as their entry points for the theft of data. This security risk can lead to major monetary losses and law enforcement issues. 

For this reason, the financial techs that deal with crypto will have to use secure trading platforms. 

4. Breaches in application

Understand that, digital payment and financial techs depend greatly on applications that enable end-users to fill in data that are sensitive and even transfer cash with a distinct screen touch. 

In other news, applications are among the main attack vectors. Since they are user-facing, these hackers can gain access to them more easily than when they try to gain access to the network of the company directly. 

5. Meeting of compliance requirements 

This is heavily dependent on the financial institution that you run. If you run an electronic money institution, payment institution, or a specialized bank, you will need to comply with diverse standards related to data and security privacy such as PCI DSS, GDPR, PSD2, and much more. 

When you cannot meet up with these requirements, it can most likely lead to hefty fines and even huge security flaws. 

6. Scalability problems 

When it comes to growth pains, it is mostly linked to start-ups in the financial tech industry. The reason for this is that growing practically means having to scale your infrastructure all the time. 

Normally, you are meant to have a highly scalable infrastructure in place from the start. But even if this is the case, the swift development of cyber security difficulties in such a field will demand extra changes in the infrastructure leading to monetary challenges. 

7. Financial problems

Understand that, the process of having to secure a digital payment or financial tech infrastructure is very expensive. It does not matter how scalable it is, you have to change or enhance the infrastructure continuously. 

It is important to note that, investments in tests and cyber security measures are nothing compared to what you will lose if they are foregone. 

8. Identity theft

The majority of these digital payments make use of passwords, biometrics, or even one-time payments to make sure of the security of every transaction and in verifying the identity of the person initiating it. 

Buy, there is a huge drawback to such methods. This drawback is that they can be replicated easily and will be a point of entry for hackers. 

9. Security or convenience

The digital payment users want access to their monetary products. Most times, they have to choose between security and convenience. 

But, the increase in compliance requirements and regulatory bodies will majorly force the financial tech company to strike a sturdy balance between security and convenience before they can debut a new product. 

10. IoT Devices and Mobile platforms

Since we have access to our finance at any point in time and anywhere through our mobile devices and phones, the problem we begin to face is hackers. 

If you never knew, the more devices you use in accessing a specific account, the bigger the chances of the account getting broken. Interestingly, voice assistants and IoT tend to add to this risk. 

Conclusion

On a general note, having an affordable cyber security solution of all sizes is the only way to be a step ahead of attackers when it comes down to digital payments. We have successfully highlighted some of the security threats you should be concerned about.

The article has been written by Sandhya Jane, an Indian writer, speaker, Business coach and Entrepreneur