16:06 23 January 2018
Businesses across the world are starting to invest in FinTech more openly, with the likes of Barclays Accelerator, NEX Opportunities and even the Bank of England FinTech Accelerator offering support, software, and programmes to assist FinTech start-ups in their growth. But with all good things come risks, and FinTech is certainly no exception. Cybersecurity is a vital part of secure financial technology services, but why is this the case, and what trends and solutions can we expect to see in the future to ensure the safety of the financial services? We’ve decided to investigate.
The rise of the FinTech start-up culture is an exciting one to watch, but security surrounding the technology becoming available to us is a hot topic in the industry. With any new technology in any sector comes an increased risk of cyberattacks, but where secure customer information and financial assets are concerned, this risk becomes one that needs to be dealt with. This is where cybersecurity comes in. By increasing the effectiveness of cybersecurity, not only will FinTech be able to provide improved services to its users, but the increased security lowers the risk. The lower the risk, the more likely investors will be to actually put money and assets into companies in this new financial sector – a win-win for everybody. But what can we expect from cybersecurity in the coming years? Could it improve, or can we expect to see more problems in the future?
Machine learning already plays a huge part in FinTech, and if combined with big data, this can only increase. In fact, some of the biggest techniques that could improve cybersecurity will be based on machine learning. For those that aren’t aware, machine learning is a field of computer science that gives all kinds of computers the ability to learn – all without being specifically programmed. By introducing machine learning into cybersecurity, machines could learn what risks they need to prevent, and adjust the security protocols depending on what threats are being posed.
However, machine learning could also be used to attack cybersecurity. If hackers or other threats have machine learning, any security in place could potentially be bypassed, or even battled in a sense. In other words, machine learning could prove to make cybersecurity a sort of arms race.
FinTech start-ups were created with a common goal – to disrupt traditional banking methods and improve upon them with the technology we have available to us today. While this wasn’t necessarily thought of as a good disruption initially, nowadays traditional financial institutions are starting to link to FinTech start-ups and the services they have on offer. These links, however, could prove to be more of a risk than an improvement. After all, as new interfaces are built to link start-ups and banks, vulnerabilities arise and cyberattacks can often find a way through more easily. To help reduce this risk, digital financial systems need to undergo an amazing amount of scrutiny and testing before it ever goes into use.
It’s unlikely that you’ll have passed through this year without having heard of the cryptocurrency Bitcoin, but for those who haven’t read into it beyond the occasional news article; you may not know what the ‘blockchain’ is. Well, now is the time to start reading up on this secure ledger, as this technology could prove to work as a base for cybersecurity in the future. Blockchain offers a whole new way of storing information without any single centralised authority – and while this might sound risky, it actually increases the security of the information stored. However, the risk here lies in the fact that, if there is a successful cyberattack, the information lost is not at all easy to recover, and accountability and liability are practically impossible to work out.
FinTech is an undeniably impressive sector to watch, with investments and developments constantly increasing its scope. But with cybersecurity not necessarily as strong as it could be, can we really trust in these technologies just yet? That’s ultimately for you to analyse and decide. For now, we can only watch and invest in the upcoming security trends.
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