Technology and Startups

FinTech Data Security

Data breaches are no longer considered a rare event, it is now a consistent cost of doing business in a digital world. Cyber-crime is profitable and very few cyber crimes are solved. The low conviction rates is an impetus driving young hackers to take up cyber crime. Data has often been described as the new oil and service providers are grappling with mountains of new data. Storing data in a secure manner is becoming increasingly complex. Startups in the Fin-tech Space are locked in a constant arms race with hackers with each upgrading their arsenal at regular intervals.

Cyber Security For Fin-techs

Customers accessing digital finance products have been demanding strong security. Governments across the world have responded to this threat by setting up cyber security monitoring units. Fin-techs cannot rely on governments for their security and need to adopt a proactive approach. Some of the steps they can take to harden their defenses against data breaches are :-

    • Keep Security High Tech With A Human Touch
      No software can by itself ward off all cyber attacks , human guidance and intervention is a pre-requisite for ensuring good security. Investing in costly software products to monitor and encrypt data is worth the cost in the long run.
    • User Simulations Of Attacks
      The best way to deal with information security is to train your team to anticipate it. Have a standard operating procedure in place to ensure the different departments of your company like the PR, IT and HR teams know how to react to threats.
    • Ensure Regulatory Compliance
      Build a team of talented individuals who can advise you on maintaining the security and integrity of your data. For instance the US has mandated that mobile applications offering digital health solutions must be HIPAA compliant. Audit your code with external agencies who are trained to detect bugs and flaws in the system architecture.
    • Bug Bounty Program
      Organize regular events where white hat hackers can take a shot at hacking cyber security architecture. Reward those who are successful in breaking through and patch your systems once flaws are discovered. Facebook is known to pay close to US$ 15,000 to researchers who discover bugs on their platform. This has helped it become the most secure social network.

holo lens laptop

Data Security Laws in Europe

New laws introduced in the European Union state that companies facing a data breach could face fines up to 8% of their global turnover. If the same laws were applied in India, Reliance Jio would have to pay a fine of US$ 4 billion on it’s turnover of US$51 billion (FY2017) for it recent data breach of customer information.

New laws in Europe and across the world are increasing the legal costs and regulatory scrutiny of information security failings. Data processors in the European Union will also be subject to the new laws which until now excluded them.  As a result of all these developments, information security will become more complex in coming years requiring fin-tech firms to prepare contingency plans for worst case scenarios. For more details on upcoming changes to data security laws in Europe visit www.eugdpr.org

Abhay N

Author : 

Abhay is the founder and managing editor of India Microfinance. He is passionate about microfinance, financial inclusion and social entrepreneurship in India.

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