Source: Financial Tech Review
The fintech services have transformed, automated, and disrupted the industry for the higher .But here are still some issues that require to be addressed, just like the concern for data security within the implementation of fintech services within the existing banking solutions.
Technology has been transforming the general financial services industry steadily. Initially, fintech has emerged in only a little space during this industry. Now it’s become more customer-driven. Fintech was commonly wont to facilitate the working of traditional financial services.
Now, the technologies have grown new branches, and therefore the ones that come under fintech include insurance technology, payments, financial data APIs, banking, regulatory technology, and mobile banking. While fintech has brought a trove of advantages and convenience to customers, it’s accompany a group of challenges also.
Check out the five hidden risks that are prevailing in the fintech industry:
Cybercrime in Finance
Although banks put their maximum effort to stay the info safe and secured, it are often harder to guard everything from cybercrime. Many cyber crime solutions have helped Fintech industries to beat this challenge. Blockchain technology has been ready to control this issue. With the emergence of latest industries, the blockchain industry must specialize in developing the simplest solutions.
Use of massive Data
The Big Database comes with both opportunities and obstacles for Fintech technology providers. Through customer databases, social media, and news feeds, the banks can provide better services to their customers. But, torrent for sorting the unstructured data for necessary information is extremely small. Hence, powerful data analytics technology is required to realize the advantages. Furthermore, data analytics solutions are emerging with manageable risks, trading, and more financial services.
The regulatory environment is usually changing, and therefore the financial institutions face constant challenges to stay up with the change. The RegTech industry can help overcome the burden of compliance. Utilizing the newest Fintech technologies to report regulatory compliances, RegTech startups are ready to close the gap between the financial industry and their regulations.
New Encryption Technology
With the increase of disruptive technologies, the performance of the finance industry has enhanced. But these technologies also create major issues within the industry. As an example , blockchain has opened some security concerns because it are often easily hacked. Transactions in blockchain are supported trust between two or more parties, but the trust isn’t often kept.
Data Integrity Risks
Today, customers can use mobile phones to access their accounts and transfer funds. But if financial firms use mobile devices without a secure encryption algorithm, integrity issues may arise.
Cloud-based Security Risks
Cloud-based solutions don’t have proper security measures which will corrupt financial information. Companies with inefficient cloud-based solution partners affect substantial data losses. Hence, it’s knowing update and be wary when selecting a cloud-based service provider.
Most banks use the Society for Worldwide Interbank Financial telecom system (SWIFT) to exchange crucial financial information more securely. But the advancement of hackers are often seen by a recent attack on one among the SWIFT infrastructure. As banks and financial firms have loopholes in their processes, hackers take this chance and launch malware attacks.
Application Security Risk
Banks used fintech apps to access real-time financial details of their customers. Still, if software applications haven’t any comprehensive security modules and efficient codes, they instantly become susceptible to cyber crimes. Therefore, when creating a fintech software solution, make sure that it includes all the essential features to stop hackers from stealing customers’ data.