- Cyber security
1.1 Cyber security in Finance Industry
2.1 Risks Associated by Fintech
- Navigating the Risks
Cyber security are said to be computer security. This cyber security aimed for the protection of computer systems and networks from the theft of or damage caused to their hardware, software, or electronic data, as well as cyber security helps from the disturbance or misdirection of the services. Thus, cyber security is known for information technology security.
Cyber security is the field with more importance due to increased dependence on computer systems. Due to the growth of Internet and wireless network such as Bluetooth and Wi-Fi moreover smart devices, like smart phones, televisions, and the several devices that set up with “Internet of things” leads to complexity in terms of politics and technology. Thus, in this modern world cyber security play a vital role to meet over the challenge.
Cyber security in Finance Industry
Money is a device that allows the social order to do certain things. Without money we couldn’t do exact efficiently. Therefore, in the fast growing Economic world, technology is fetching more dominant role in the finance industry. According to Simon Cox of Envisioning Technology, which is called as research foundation with independent technology says that in-fact finance and technology always been closely linked with each other. This statement forced the economic world to create a specialized financial technology called FinTech which is said to be rapidly growing sector. Financial technology is developing faster than ever with the rise of occurrences like cloud computing and big data analysis. This leads finance as 100 per cent technology in the world. As a result, organizations in the finance world are tackling with some big issues and looking forward to some intriguing developments.
FINTECH is alleged to be money technology and are largely start-up technology and money experience companies, providing domain-specific product and services that are already provided by numerous ancient money establishments like banks, quality management corporations, and insurance corporations. FinTech inaugurated within the Nineties once the net and e-commerce business models arose and in coming amount banking in most components were already utterly digitalized. Money technology has been worn to alter investments, insurance, trading, banking services and risk management. It’s associate degree rising business that uses technology to enhance activities in finance. Therefore the creation of money technology and its innovation are aimed to stay up with ancient financial ways within the delivery of monetary services. The services could originate from numerous independent service suppliers still like atleast one commissioned bank or insurance company. The interconnection is enabled through open genus APIs (Application Programming Interfaces, are the hooks and software system employed by programmers to create applications that connect with alternative companies and technology. Banks with genus APIs change fintech companies to create apps that utilize their infrastructure, like bank account balances) and open banking and supported by laws like the Payment Services.
Risks Associated by Fintech
The fintech industry is booming, disrupting the financial sector and attracting billions in investment globally. Even though the following are the five biggest risk faced by Fintech businesses in 2020
- Proficient legal responsibility: Careless advice and imperfections in client services are collective risks for financial services based companies, particularly with fintechs which offer new financial products by new distribution models.
- Controlling Environment: New technology, new products and new distribution fetch chance of wealth along with new regulatory exposures. Therefore, Fintech companies should confirm to keep top execution of suitable and satisfactory risk management systems.
- Fund Robbery: Always high frequency of funds movement is handled by majority of FinTechs. High volumes of payments, transactions and customer accounts, as well as the fast growth and implementation of new technology, leaves them vulnerable to theft.
- Cyber Event: Fintech companies are prime targets for cybercriminals for it nature of operations. Thus, the major challenged faced by fintech will be Network security, data breaches or denial-of-service attack along with damage and rectification costs.
- Technology failure: Innovative technology is essential for fintech companies. So when technology failure arise which can make customers unable to access services resulting in lost income or lost customers.
Navigating the Risks
Keep on top of dynamic financial technological industry trends along with identifying appropriate regulatory rules and guidance can support the risk management efforts and its challenge by
- Building safer and sounder partnerships
- Incorporate compliance into the development cycle
- Ensuring things right under the shoes of customers
Compared to traditional equivalents, with the upswing of the universal smartphone and “always online” culture made consumer behavior changed to essential financial services with new technologies which offering a one-piece user experience at a cheaper cost. Moreover, Fintech used to describe businesses that rub in disorderly technology to conformist financial services such as lending, money transfers and mobile payments. And some key areas of regulation which affect fintech businesses like data security, consumer protection, anti-money laundering and securities regulation. In addition, anti-spam legislation involves businesses to fulfil with certain requirements in collaborating electronically with consumers and restricts the types of communications that can be sent without the permission of the recipients.