With the growing popularity of digital payments, cybercriminals have found a lucrative target. Cybersecurity data breaches rose sharply by 72% in 2023 compared to the previous record-breaking year. This shows the need for financial technology companies to implement strong banking security.

While digital payments offer benefits, businesses must protect themselves and their customers from cyber threats. Understanding the common cyber threats and implementing effective countermeasures are key to long-term success.

The Importance of Cybersecurity for Digital Transactions

With the increasing reliance on online platforms for financial activities, the risk of cyberattacks has grown exponentially. These attacks can lead to significant financial losses, damage to reputation, and erosion of customer trust. From identity theft to data breaches, the consequences of compromised security can be severe.

To prevent such consequences, cybersecurity measures are required for every financial institution. By applying cybersecurity best practices such as encryption, strong authentication, and regular security audits, organisations can protect customer data, prevent fraud, and maintain operational resilience.

Threat Landscape

Cybercriminals employ various tactics to exploit vulnerabilities in digital systems. Phishing attacks, a common method, deceive users into divulging sensitive information through fraudulent emails or websites. Another prevalent threat is ransomware, where cybercriminals encrypt a victim’s data and demand payment for decryption.

Additionally, unauthorised access to accounts through stolen credentials can lead to financial loss. These cyber threats highlight the need for a security framework to protect digital transactions against malicious activities.

Best Practice 1: Encryption

Cybercriminals can easily exploit vulnerable systems, leading to substantial financial losses and reputational damage. A data breach can cost millions of dollars to rectify, including expenses for recovery and ransom payments. A recent IBM report indicates that the average global cost of a data breach exceeds $4.45 million. 

Encryption safeguards sensitive information by transforming it into an unreadable format, accessible only to authorised parties possessing the correct decryption key. This cryptographic process employs complex algorithms and keys to safeguard data integrity and confidentiality.

Best Practice 2: Multi-Factor Authentication

Cybercriminals can easily steal passwords and pins through brute-force attacks, systematically testing numerous combinations until successful. Multi-factor authentication (MFA) offers a robust defence against this threat.

Requiring users to provide multiple forms of identification strengthens account security. This authentication combines different types of verification. This includes information only the user knows, like passwords, items the user possesses, such as security tokens, and unique physical traits, like fingerprints.

By requiring multiple verification steps, banks and financial institutions create a formidable barrier against unauthorised access to sensitive information and funds. Additionally, multi-factor authentication enhances user account management by requiring unique authentication factors for each individual.

Best Practice 3: Employee Training

Organisations with regular cybersecurity training experience a 40% reduction in security incidents compared to those without, according to  This emphasis on employee education is justified as human error remains a primary target for cybercriminals.

Hackers frequently exploit employee vulnerabilities through tactics like phishing, social engineering, and other deceptive methods. By training employees to recognize these threats, financial institutions can mitigate the risk of data breaches and financial losses.

Such incidents can result in substantial financial losses and damage to an institution’s reputation. Consequently, comprehensive cybersecurity training is essential for all bank employees to mitigate these risks.

Best Practice 4: Regular Security Audits

A security audit is an evaluation of an organisation’s digital infrastructure, designed to identify vulnerabilities that could compromise digital transactions. This process involves examining security policies, testing safeguards, and ensuring compliance with industry regulations.

Given the escalating complexity of cyber threats, financial institutions must prioritise regular security audits. Banks can uncover weaknesses before malicious actors exploit them by scrutinising systems and processes.

Regular security audits empower organisations to proactively strengthen defences by implementing essential safeguards such as firewalls, antivirus software, and antimalware solutions. To ensure impartiality and objectivity, it is essential to engage an independent expert to conduct these assessments.

Best Practice 5: Incident Response Planning

As the frequency and sophistication of cyber threats continue to rise, the need for robust defences becomes increasingly critical. Safeguarding digital transactions requires a proactive approach, including a well-defined incident response plan.

An incident response plan is a crucial component of any organisation’s cybersecurity strategy. This formal document outlines strategies for preventing, detecting, and responding to security breaches that could compromise financial data. By establishing clear protocols and assigning specific responsibilities, banks can minimise the impact of cyberattacks and protect both their reputation and customers’ assets.

To be effective, an incident response plan must be established in advance and assigned to specific teams. By following established frameworks, such as those provided by the National Institute of Standards and Technology (NIST) and SANS, organisations can develop comprehensive plans. These resources offer detailed guidance on handling various types of security incidents to ensure a coordinated and efficient response.

Conclusion

Protecting digital transactions requires a multi-faceted approach. Implementing cybersecurity measures is essential for protecting sensitive financial data and maintaining customer trust.

Encryption and multi-factor authentication are foundational elements of a strong security posture. Encryption safeguards data by rendering it unreadable to unauthorised individuals, while multi-factor authentication adds an extra layer of protection by requiring multiple forms of verification. These are just two examples of critical best practices financial institutions should adopt.

Financial institutions must prioritise cybersecurity to maintain customer trust and protect their bottom line. By investing in advanced security measures and staying vigilant against emerging threats, organisations can effectively mitigate risks and ensure the integrity of digital transactions.

Data belonging to 20.4 million UK citizens was affected by cyberattacks made against financial institutions at the end of 2023. This represents a 143% increase from the 8.4 million individuals affected in the previous year. The demand for robust cybersecurity is ever-increasing in financial institutions.

Financial Institutions encompass a wide range of businesses dealing with financial and monetary transactions, including banks, insurance companies, and brokerage firms. These institutions are pivotal for a functioning capitalist society, simplifying transactions, enabling individuals and entities to seek investment or lend money, and assisting in managing assets.

The increasingly digitalised nature of the economy, including the rise of online-only financial institutions like challenger banks, has accelerated the development of financial technologies and their adoption in the market. As a result, Software as a Service (SaaS) for finance, such as digital banking, electronic payment, online investment, and other online-based services, makes financial services more accessible to the consumer. But, with the ease of access technologies provided, new challenges have also emerged, especially regarding cybersecurity.    

Financial institutions are enticing targets for cybercriminals. Therefore, cybersecurity has become integral to banking security in protecting data from malicious attacks. 

Here are seven top cybersecurity solutions to secure data from online threats.

1. AI-Powered Threat Detection

The ability for AI models to perform pattern recognition on large amounts of unstructured data is opening up an exciting new frontier in threat detection for cybersecurity teams. AI tools can potentially flag subtle differences, anomalies, and patterns that could point to a zero-day threat or the presence of a bad actor in the system. 

Some industry experts believe that AI-powered threat detection will be pivotal in helping cybersecurity teams respond to rapidly evolving cyberattack strategies that are increasingly difficult to combat — somewhat ironically, this uptick in the frequency and sophistication of attacks is at least partially due to the availability of AI tools, which hackers are also putting to use. 

AI’s adaptive learning and advanced recognition capabilities enable automated responses to threats and can predict future risks by analysing past patterns. This helps reduce false positives and saves security teams time on assessments.

2. Multi-Factor Authentication

Multi-factor authentication has quickly become the standard in security and identity protection as more and more people bank, shop, and administer their lives entirely online. Put simple, it’s a multistep account login in which more information besides username and password must be provided. 

Typically referred to as “something you have, something you know”, multi-factor login procedures drastically reduce account hacking, allowing security teams to detect suspicious activity that occurs in the logging processes. 

3. DDoS Mitigation

Distributed Denial of Service (DDoS) is a coordinated cyberattack that overwhelmingly sends a request to the server simultaneously, which makes the server slow down or even go offline. DDoS mitigation is important for banking service security to prevent the interruption of vital services. 

Cynersecurity teams can perform DDoS mitigation by implementing a load balancer, restricting requests from certain places, and blocking communication from outdated or unused ports, protocols, and applications.

4. Compliance

Compliance is vital to both ensure the security of systems and organisations against cyber attack, but also to prevent legal penalties and repercussions if an organisation is found to be in breach of existing regulations. These regulations ensure that an organisation’s cybersecurity set up is in line with the security and data protection laws in the countries where it operates, with the end goal of mitigating risk to the consumer — or just people in general whose data is collected and kept by the company. 

There can be serious legal and financial risks associated with non-compliance — tied to both finance and cybersecurity. For example, in 2021, Natwest was fined over £264 million by the FCA for its extended failure to identify and prevent money laundering. Since the FCA was established, there has not been a year when its total fines issued have been less than £1 million. In the UK, other financial and cybersecurity compliance regulations are DPA 2018, UK GDPR, NIS regulations, and the Computer Misuse Act 1990.

5. Database Activity Monitoring

Database Activity Monitoring refers to any set of tools that monitors and analyses database activity. The goal of this monitoring is to flag and report deceptive, illegal, or undesired behaviour taking place within a system. Ideally, these tools run and operate without any serious impact on user experience.

Because most databases don’t monitor or flag suspicious activity by default, unless you have a tool that handles activity monitoring, making third party solutions a necessity in many cases. According to monitoring software solutions vendor Cyral, most systems also don’t collect enough data to enable “a full forensic investigation of historical breach events.” Also, databases that do often log and store this information inside the database itself. Any attacker that gains access to the database can then, supposedly, have write access to the full collection of tables (as is often the case), meaning they can easily delete any activity rows associated with their presence and theft of data.

6. SQL Injection Prevention

SQL injection is a code injection technique attackers use to steal, spoof, and manipulate data. An effective SQL injection attack can result in attackers gaining unapproved access to sensitive data like including credit card information, PINs, or other private information. In banking security, a failure to prevent SQL injection can result in attackers altering balances, voiding transactions, and even transferring money to their bank accounts. 

Cyberattackers inject malicious SQL code into the backend of a target system when they discover defenceless user inputs in a web application or web page. The hackers can then use this opening to locate the IDs of other users within the database, impersonating these users — usually those with data privileges such as the database administrator — to run malicious code within the system. 

7. Regular Risk Assessment and Training

Perhaps most importantly, the best defence against the rising tide of cybercrime is a cybersecurity conscious culture. Financial institutions should conduct regular risk assessments manually to identify potential vulnerabilities and threats to their systems and networks. 

They should regularly evaluate and revise systems and networks based on analytics and assessments to prioritise cybersecurity initiatives and protect vital assets. Security teams shouls also conduct periodic security awareness training, which can strengthen cyber-readiness among finance personnel. This is particularly important given the rise in generated AI-driven phishing campaigns and other technologically democratised forms of cyber crime.  

Case Study – Cybercriminals in UK Businesses

An investment article from IFA magazine reported 300,000 cybersecurity breaches in finance institutions across the UK in 2022 alone, making them the second-highest number of data breaches from all industries after the IT sector. Reports estimate losses in the region of £27 billion per year, with small businesses in the UK affected the most by cyberattacks, usually phishing. 

The UK authority encourages its citizens to be more aware of the possibility of cyberattacks, especially phishing and fake charity emails, as online threats are growing exponentially. Ledi Sallilari from the SEO consulting firm Reboot also suggested that more complex passwords can help prevent account breaches. 

The rapid expansion of internet usage brings new challenges for cybersecurity. Proper knowledge and awareness about cyber criminals should become mandatory for all Internet users to protect their online data.

Financial institutions, responsible for managing customer funds, need to implement strong cybersecurity measures. With more secure backend systems, they can protect assets and maintain customer trust in an increasingly digital world.

The financial sector faces a growing threat—cybercrime.

Cybersecurity Ventures predicts a significant rise in cybercrime costs, with the total impact of hacks, breaches, and data theft potentially reaching as high as $10.5 trillion a year by 2025. As attacks become more common and more severe, mitigating these risks and preventing fraud is paramount for financial institutions and financial technology companies alike.

Luckily, ongoing advancements in technology offer fintech organisations a powerful arsenal of weapons to combat cybercrimes. Adaptive fraud prevention systems use artificial intelligence (AI) to detect and prevent fraudulent activity in real-time. These intelligent systems continuously learn from new data, allowing them to identify evolving patterns and improve cybersecurity.

Introduction to cyber fraud protection

Cybersecurity is crucial in the financial services industry, where sensitive financial data and transactions are a prime target for cybercriminals. Moreover, cyber attacks can inflict significant financial losses, not just through direct theft but also via hefty regulatory fines, legal costs, and reputational damage.

Financial institutions have a responsibility to safeguard customer trust by implementing robust cyber fraud protection measures. This includes advanced technologies like network security, intrusion detection systems, and malware protection.

By securing financial transactions and customer data, these measures not only deter cyberattacks but also mitigate their impact, fostering customer confidence in the bank’s security posture.

Common types of Cyber fraud

The financial sector occupies a bull’s-eye for cybercriminals, ranking second only to healthcare in global cybercrime costs according to the IBM Cost of a Data Breach Report 2023. Financial institutions face an average loss of $5.9 million per cyber incident, highlighting the critical need for robust cyber fraud protection measures.

These attacks come in various forms. One of the most common isphishing scams. These are attempts to trick people into surrendering sensitive information. Meanwhile, ransomware attacks aim to disrupt operations or extort money by encrypting critical data. Distributed Denial-of-Service (DDoS) attacks overwhelm systems with traffic, making essential services unavailable to legitimate customers.

Advanced cybersecurity technologies

The fight against cyber fraud necessitates sophisticated tools, and advanced technologies like AI and machine learning (ML) are playing an increasingly crucial role.

AI fraud detection uses ML algorithms to identify fraudulent activities within vast datasets. These algorithms are trained to recognise patterns and anomalies that deviate from typical user behaviour and transaction patterns. Once the patterns are identified, attackers can be purged from the system before they have a chance to steal anything of value. Cybersecurity systems powered by ML can drastically reduce the amount of time bad actors spend inside a system.

ML algorithms excel at identifying patterns and trends that might signal potential fraud. Also, by analysing big data, these algorithms can adapt quickly to evolving fraud tactics.

They can detect and alert security teams within seconds of suspicious behaviour, such as unusual purchases or login attempts from unfamiliar locations. Thanks to continuous data analysis, businesses can gain an immediate advantage, allowing them to swiftly identify and respond to suspicious activity, ultimately minimising potential losses.

Case studies

The financial sector is actively exploring the potential of AI to combat cyber fraud. Mastercard’s Decision Intelligence technology exemplifies this trend. By analysing historical spending habits, this AI solution creates a personalised baseline for each cardholder’s behaviour.

This approach is a significant improvement over traditional, one-size-fits-all methods, which often lead to false declines. AI’s contextual analysis of transactions allows it to bypass common triggers for false positives, ultimately enhancing fraud detection accuracy.

Future prospects

The future of cyber fraud protection hinges on the continued evolution of technology. One promising area lies in adaptive technologies, such as behavioural biometrics. Additionally, these systems move beyond static passwords or fingerprints, creating a unique user profile based on a person’s interaction patterns.

These patterns are ‘behavioural fingerprints’ that include typing style, mouse movements, and even how an individual holds their phone. Over time, the system learns user habits, building a digital identity that can detect deviations indicative of unauthorised access.

This approach is particularly effective because it’s nearly impossible for hackers to replicate one’s unique behavioural traits, even if they steal the password. This adds a crucial layer of security that traditional methods cannot provide.

The digital banking industry faces cybersecurity challenges. A Statista report shows a 10 percent jump in global malware attacks in 2023, reaching 6.06 billion incidents.

Cybercriminals are growing more skilled, leading to more frequent data breaches that expose vulnerabilities in banking security. Moreover, effective risk management and strong network protocols are essential to securing digital banking operations.

Introduction to Cybersecurity in digital banking

As online transactions become the norm, strong cybersecurity measures become more crucial. Banks keep sensitive financial data and handle high-value transactions, making them prime cyberattack targets.

Effective cybersecurity is a multi-layered approach. Also, it combines advanced technology, strict policies, and constant monitoring to fight cyber threats. These security measures shield not only a bank’s finances but also customer personal information.

For that reason, cybersecurity is the foundation of trust and reliability in finance. Without strong security protocols, the balance between innovation and managing risk is disrupted, potentially shaking customer confidence in digital banking.

Early Cybersecurity practices

The rise of the internet gave birth to a new genre of malicious activity. Cybercriminals emerged to target this new frontier. They launched worms, malware, and phishing attacks.

In response to these escalating threats, the 1990s saw the introduction of firewalls and antivirus software. Additionally, these early security measures acted as barriers between networks to protect systems from unauthorised access.

Cybercriminals constantly develop new viruses and threats. Likewise, antivirus companies continuously create new software patches and signature updates to stay ahead. Despite that, the possibility of new threats slipping through these defences remains a challenge.

Technological advancements

Fraud is a major challenge for financial institutions. Artificial intelligence (AI) has emerged as a powerful weapon in the fight against this threat.

This technology excels at detecting various types of fraud. AI algorithms can detect suspicious activity in real time, helping prevent fraud before it happens.

AI solutions go beyond simple detection. By creating detailed profiles of each customer and tracking their activities, AI can predict potential risks and prevent fraud proactively.

Current Best Practices

A strong foundation is critical to banking security. This includes constantly checking for weaknesses through risk assessments. Digital banks must update their security protocols regularly to keep pace with changing risks. Collaborations with other financial institutions and government agencies help banks stay informed about the latest threats and how to respond.

Data classification is also essential. Banks need strict controls on who can access sensitive information. Employee security training must be regular to make them aware of threats.

Case Studies

The digital bank Starling Bank partnered with cybersecurity firm HackerOne in 2019. This partnership created a streamlined system for anyone to report weaknesses found in its apps and website.

The initiative initially focused on specific areas and common vulnerabilities. This collaboration revealed valuable insights into weaknesses often missed during standard testing. The project’s findings allowed Starling to develop automated detection tools that proactively prevent security issues.

Future Trends

A report by Statista predicts the global cybersecurity market will hit $271.90 billion in 2029, highlighting the growing need for strong defences in digital banking. While still new, quantum computing presents a future hurdle. Its ability to crack current encryption methods means new, quantum-resistant cryptography needs to be developed for banking security.

However, machine learning and AI are expected to be adopted more widely in cybersecurity. Beyond just reacting to threats, financial institutions will also increasingly focus on proactive threat hunting. This means identifying and stopping potential vulnerabilities before they can be exploited.

The FinTech sector has changed how we manage our money. From mobile banking apps to robo-advisors, FinTech offers a new level of convenience and efficiency. But with this convenience come challenges and cybersecurity responsibilities: safeguarding the vast amount of sensitive financial data entrusted to these platforms.

Cybersecurity is no longer an afterthought for FinTech companies; it’s an essential foundation for their success. Breaches exposing financial information can have devastating consequences, not just for the companies involved but for their users as well.

Understanding these cyber threats is crucial for FinTech companies aiming to safeguard their operations and customer data. Here are the top 10 cybersecurity risks FinTech firms must be aware of in 2024.

1. Phishing Attacks

Phishing attacks trick people into divulging personal information. Cybercriminals often pose as legitimate companies through emails, texts, or phone calls. They llure victims into clicking malicious links or revealing passwords.

Phishing attacks significantly threaten financial companies because they target the human element rather than technological weaknesses. Hackers impersonate trusted sources like banks or colleagues to trick employees into revealing sensitive information or clicking malicious links. It can lead to data breaches, financial losses, and account takeovers.

2. Ransomware

Ransomware attacks involve cybercriminals holding sensitive data hostage and demanding a ransom from the victim. FinTech companies are particularly vulnerable to ransomware attacks because they rely on digital systems and customer financial data.

These attacks can impair operations, damage reputations, and lead to significant financial losses. They can be devastating, as there is no guarantee that paying the ransom will result in the safe return of the data.

3. Insider Cybersecurity Threats

FinTech companies may face a unique cybersecurity threat from their employees, known as insider threats. These insiders can be malicious, accidentally negligent, or even tricked into compromising sensitive data. Malicious insiders might steal financial information or sabotage systems for personal gain. Negligent insiders could leave data exposed or fall victim to phishing scams, unintentionally giving away access.

4. DDoS Attacks

Distributed Denial of Service (DDoS) attacks overwhelm online systems with traffic, making them inaccessible to legitimate users. FinTech firms are attractive targets for these attacks because they offer multiple entry points (banking systems, online accounts) and prioritise constant service availability.

DDoS attacks can severely hurt a FinTech company’s reputation and finances by causing downtime, raising security concerns among customers, and potentially leading to data breaches during the distraction.

5. Malware

FinTech companies are prime targets for malware attacks, accounting for 19 percent of all attacks and suffering nearly US$18.3 billion in losses in 2017. While the number of traditional banking malware strains is decreasing, it doesn’t represent a decline in overall threat. Instead, attackers are developing more sophisticated malware that uses techniques like obfuscation and slow, staged attacks to bypass antivirus detection.

6. Data Breaches

FinTech companies are under fire due to data breaches exposing sensitive financial information. Hackers exploit security flaws to steal user data, leading to financial losses, identity theft, and damaged trust. To combat this, strong encryption methods like end-to-end encryption and tokenisation can scramble data, making it useless to attackers.

7. Mobile Security Risks

Despite offering convenient access to financial services, mobile apps are a double-edged sword for FinTech companies. These apps are vulnerable due to their popularity, making strong security practices essential. Regular security updates, secure coding from the start, and robust data encryption during transmission are crucial to patching weaknesses.

8. Third-Party Cybersecurity Risks

The reliance on third-party vendors for services and integrations creates a security blind spot for FinTech firms. To address this, thorough vetting through due diligence and vendor risk assessments is crucial before forming partnerships.

9. API Vulnerabilities

FinTech companies rely heavily on Application Programming Interfaces (APIs) to enhance customer interfaces and share information across systems. While APIs are essential for data exchange, they also open doors for cyberattacks.

To fortify their defences, FinTech companies need to focus on secure API design with solid authentication methods (like OAuth or API keys), constant monitoring, and regular security assessments to identify and fix weaknesses before they become exploited.

10. Artificial Intelligence & Machine Learning Risks

The use of artificial intelligence (AI) and machine learning (ML) has increased in FinTech for decision-making processes. While beneficial, these systems also present risks if they make inaccurate decisions based on incorrect data. Rigorous testing and monitoring of AI and ML systems are necessary to minimise these risks.

Steps to mitigate threats

The cybersecurity threats facing FinTech in 2024 are varied and complex. FinTech firms must prioritise cybersecurity to protect customer data and maintain trust. By researching technology usage, training employees on cybersecurity, regularly monitoring suspicious activity, and building advanced security systems, FinTech companies can improve their defences against these evolving threats.

Moreover, data is at the heart of every fintech company, which makes them attractive targets for hackers and malicious actors.

Financial technology has created new opportunities for customers and businesses in the finance industry. Individuals can now borrow, transfer, save, and invest from the convenience of their homes. Also, the growth of the industry is massive, with fintech revenues projected to grow sixfold from $245 billion to $1.5 trillion by 2030.

However, following that growth are security risks associated with it. Accounting services firm BPM predicts that cybersecurity attacks aimed at fintech companies will only continue to grow in 2024 and beyond. Furthermore, these attacks can end in monetary losses, reputational damage, and brand erosion.

To prevent such cases, fintech security leaders globally have implemented cybersecurity measures.

1. Stripe

Founded in 2010 by Patrick and John Collison, Stripe specialises in payment processing software and application programming interfaces (APIs).

Based in South San Francisco, California, the company offers top-tier encryption and secure transmission protocols. The protocols, which adhere to the PCI DSS standards, are in place to ensure the security of credit and debit card data.

Launched in 2018, Stripe’s innovative tool Radar detects and blocks fraudulent transactions. After its 2.0 update in 2018, the company claimed it helped reduce fraud rates by an additional 25% for its users.

With other services like Stripe Terminal, Stripe Tax, and Stripe Capital, Stripe has become a trusted name in online payment processing. It powers payments for major companies like Amazon, Google, and Shopify, all of which demand high-security standards.

2. Square

Owned by Block, Inc., Square was launched in 2009 by CEO Jack Dorsey and co-founder Jim McKelvey. Square offers an all-in-one financial services platform, including customer booking, e-commerce, payroll, shifts, loan financing, and banking.

In 2021, Square received FDIC approval from the Utah Department of Financial Institutions. Additionally, with end-to-end encryption, regular vulnerability assessments, and secure data storage, Square reached Level 1 PCI DSS certification. This is the highest level for payment processor certification.

3. PayPal

Launched in 2000 from the merger of Confinity and X.com, PayPal is a leader in secure online transactions.

Acquired by eBay in 2002, PayPal became the leading global payment application after eBay discontinued its Billpoint service. It has arguably outpaced competitors like Citibank C2IT, Yahoo! PayDirect, and BidPay from Western Union.

PayPal uses advanced encryption technologies and multi-factor authentication to protect user data. With its continuous monitoring and fraud prevention mechanisms, the company is compliant with industry standards.

According to the company, its fraud detection tools are informed by data from 1 billion monthly transactions. It claims that the tool gets smarter with each transaction.

4. Ant Financial (Alipay)

Ant Financial’s Alipay, is the second-largest international payment processor after Visa.

Founded in 2014 by Jack Ma as an affiliate of Alibaba, Ant Financial offers a range of products. Available services include electronic payment processing, banking, and mobile payments through brands like Yu’ebao, Huabei, and Xianghubou.

Ant Financial combines advanced cybersecurity measures such as AI-driven fraud detection, biometric authentication, and data encryption. Alipay itself also holds the internationally recognized ISO/IEC 27001 cybersecurity certification.

Used by more than 1.2 billion users, Ant Financial is protected by its AI-powered risk engine AlphaRisk. With the tool, Alipay’s fraud loss rate has been kept under 0.64 in 10 million, way lower than the industry average.

5. Plaid

Established in 2013 by Zack Perret and William Hockey, Plaid is an embedded financial platform. It facilitates secure online payments and transactions by connecting users’ bank accounts to finance applications.

Plaid ensures authorised access to bank data through secure bank portals, which eliminates the need for user credentials. In October 2020, Plaid introduced “Plaid-Link,” a service that enables real-time payments for loans, insurance, and wages. It securely connects 12,000 US financial institutions, plus many more in Canada, the UK, and Europe.

6. Chime

Founded in 2012 by Chris Britt and Ryan King, Chime partners with regional banks to offer fee-free mobile banking services. Chime uses encryption, access protocols, continuous monitoring, and proactive fraud prevention to keep its payment processes secure.

In April 2020, Chime launched the fee-free overdraft product “SpotMe.” It successfully processed $375 million in Economic Stimulus Payments one week from the scheduled government disbursement.

7. Adyen

Adyen, listed on Euronext Amsterdam, is a Dutch FinTech company founded in 2006 by Arnout Schuijff and Pieter van der Does. Primarily catering to businesses, Adyen offers e-commerce, mobile, and POS payment solutions. The company successfully achieved 1.3 billion euros in revenue in 2022.

Adyen’s cybersecurity measures include encryption, tokenization, secure data storage, and regular security assessments, all backed by Level 1 PCI DSS certification.

8. Sift

Founded in 2011, Sift is one of the cybersecurity companies providing AI-powered fraud platform. It uses machine learning combined with data network scoring 1 trillion events per year to offer security solutions.

The company notices that online fraud is a growing problem, especially for retailers and financial institutions. Therefore, Sift’s algorithm distilled over hundreds of millions of user actions to create fraud pattern recognition tool.

Sift has received several accolades, including being named a leader in 2023 Forrester Wave for Digital Fraud Management and G2’s Momentum Leader in Spring 2024.

9. Darktrace

Cybersecurity company Darktrace, established in 2013, uses AI to respond to cyber threats in real time. Since its inception, the tools it created has been deployed over 9,000 times.

With its Enterprise Immune System technology, Darktrace is able to handle Industrial Operational Technology, email, SaaS, cloud, network, and endpoint safety. More than 9,400 organisations, including major financial institutions, rely on its advanced solutions.

The company was included in The Cyber Award’s AI Product of the Year in 2020 and Fast Company’s top 10 most innovative AI companies for 2022.

10. Netskope

Cloud-based cybersecurity company Netskope was founded in 2012 to help organisations apply zero trust principles. The company’s solutions protect data across cloud services and apps, which makes it pivotal for fintech institutions relying on such technologies.

The California-based firm helps financial services companies meet compliance requirements such as FINRA, PCI-DSS, GLBA, and GDPR. Not only that, it provides necessary protection, such as SWG, CASB, ZTNA, DLP, Cloud Firewall and SD-WAN.

In 2024, Netskope is recognized as a leader in the Gartner Magic Quadrant for Cloud Access Security Brokers (CASBs).

What makes these a success

These top cybersecurity firms in fintech have set high standards in cybersecurity. Their efforts have significantly contributed to a safer digital landscape for fintech.

They have also demonstrated collaboration with fellow financial or cybersecurity experts. Collaboration means having access to specialised knowledge that may not be available in-house. This includes latest threat intelligence, security tools, and tailored audits.

Additionally, it is imperative that companies adhere to industry standards and regulations. Compliance is the first step in building trust with users and stakeholders alike.

With 64% of financial services institutions falling victim to ransomware attacks last year, finance organisations should follow best practices from these companies.

Cybersecurity is a vital component of digital banking. Customers need to trust systems to manage their money online through apps or websites, without visiting a physical bank. This offers convenience, allowing users to check balances, transfer money, pay bills, and even apply for loans from their computers or smartphones.

Because digital banking involves sensitive personal and financial information, it has unique cybersecurity needs to protect against hackers and fraud. One key security measure is encryption, which scrambles data so that only authorised users can read it.

Another important measure is two-factor authentication, which requires users to provide two forms of identification, such as a password and a code sent to their phone, to access their accounts. These measures help ensure that digital banking remains safe and secure for users.

Cybersecurity Risks and Preventative Measures

One of the biggest concerns in the banking industry today is the security of mobile banking apps. As more people use these apps for financial transactions, weak security measures can make them vulnerable to hacks.

Additionally, banks face threats from third-party organisations, as hackers often target less secure shared banking systems. Third-party networks cab also be hijacked to gain unauthorised access. The growing field of cryptocurrency also presents new cyber threats… The unstable nature of cryptocurrency and limited understanding of securing these digital assets make them attractive targets for cybercriminals.

To protect against cyber attacks, banks are implementing various preventative measures. Conducting thorough security audits helps find system weaknesses. Setting up strong firewalls while updating antivirus and anti-malware software creates a solid defence against cyber threats. Multi-factor authentication (MFA) and biometrics add extra security layers, making it harder for unauthorised users to access accounts.

Automatic logout features end user sessions after inactivity. Meanwhile, banks are educating customers about secure practices like avoiding public Wi-Fi for banking and regularly updating passwords. These combined efforts enhance the overall cybersecurity of the banking sector.

The Importance of Regulatory Compliance

Regulatory compliance is crucial in digital banking cybersecurity for several reasons. First, it ensures the protection of customer data. Regulatory standards include guidelines that help banks protect sensitive information. This reduces the risk of data breaches and identity theft. Compliance also builds and maintains customer trust. When customers know that a bank follows security standards, they feel more confident about the safety of their financial information.

Following regulations helps banks avoid legal problems, including fines and sanctions, which can be costly and harm their reputation. Regulations provide a framework for consistent security practices across the industry. This ensures all banks meet a basic level of security to prevent gaps that hackers might exploit. Additionally, compliance requires banks to conduct regular risk assessments and audits, helping to identify weaknesses and strengthen their cybersecurity measures.

Regulatory compliance also ensures that banks are prepared to maintain operations and protect customer data, even during cyber attacks or other disruptions. This includes having disaster recovery and business continuity plans in place.

Lastly, compliance can drive innovation by encouraging banks to adopt new technologies and practices that enhance security. This proactive approach helps banks stay ahead of emerging threats and continuously improve their cybersecurity measures.

Case Study: Revolut

Revolut is known for its strong cybersecurity measures. The bank uses advanced encryption to ensure that data shared between users and the bank is secure, protecting personal details, transaction histories, and account balances from being intercepted by hackers.

Additionally, Revolut requires users to enable two-factor authentication (2FA), adding an extra layer of security by requiring a second form of verification, such as a code sent to their phone. The bank also employs biometric verification, such as fingerprint or facial recognition, to further secure user accounts.

Revolut also uses machine learning to detect and prevent fraudulent activities in real-time, ensuring that suspicious transactions are quickly identified and blocked.

Case Study: Chime

Chime is another digital bank that prioritises cybersecurity. Chime protects user data through encryption, ensuring that communication channels are secure. The bank also offers two-factor authentication to enhance account security, requiring users to verify their identity with a second form of verification.

Chime provides real-time transaction alerts, notifying users of any account activity immediately. This allows users to quickly identify and respond to any suspicious transactions. Additionally, Chime employs measures such as automatic logout after periods of inactivity to prevent unauthorised access. These security features help Chime maintain a secure banking environment for its users.

Looking ahead, cybersecurity trends in digital banking are likely to focus on several key areas to stay ahead of emerging threats. One trend could involve increased adoption of artificial intelligence (AI) and machine learning to enhance threat detection and response capabilities. AI can analyse vast amounts of data in real-time to identify unusual patterns or behaviors that may indicate potential security breaches.

Staying ahead of cybersecurity threats requires a combination of technological innovation, proactive defense strategies, and ongoing education. Digital banks that prioritise cybersecurity and adapt to these future trends will be better equipped to protect their customers’ data and maintain trust in an increasingly digital banking landscape.

Here are the most trends that affect it the most:

A growing reliance on banking technology as the industry digitalises has naturally brought both cybersecurity and financial services security into the limelight.

Digitalization will always come with cyber risks, and financial services will always come with security concerns. Banking is among the industries most vulnerable to cyber threats. A lack of financial services security is a gap cybercriminals can exploit, especially as banking goes through a digital transformation. 

Introduction to Cybersecurity Trends

Financial companies face much more challenging cyber threats in 2024. Cyber risks boomed as the world shifted online during the Covid-19 pandemic. This trend is getting amplified by the implementation of AI in financial services, as well as the proliferation of AI-enabled cyber-criminality broadly.

This period of innovation is creating a greater array of possible vulnerabilities for criminal groups to exploit  – a much bigger attack surface.

This extends to much bolder targets – the International Monetary Fund (IMF) said in March it was hit by a cyber attack. This is happening worldwide and continues the trend established last year, with Indonesia’s State Cyber Agency (BSSN) recording 350 million cyberattacks occurred in 2023. That includes a ransomware attack on its National Data Centre (PDN).

In previous years, the banking technology security system was linear. In an era with hundreds of interconnected devices, banks have a much more complex challenge to keep their networks secure. Cyber risks are intense and varied, including data breaches, Botnets, and DDoS attacks.

These attacks will hit consumer financial services, through temporary outages, the theft of personal data, and impacting company performance assessments.

Trend 1: AI in Cybersecurity

Artificial intelligence (AI) technology has already created huge changes in business behaviour. It has also encouraged a shift from reactive to proactive approaches in detecting cyber-attack patterns.

As businesses are forced to respond to the widespread arrival of this revolutionary technology.

A simple example of threat increases due to AI is the use of generative AI to increase phishing attacks. It is easier to generate a lot more spam than it was before.

A better piece of news is that AI also brings more precision to recognizing cyber-attack patterns. Machine-learning can study cyber threats in depth and both identify them and identify vulnerabilities in financial services security, This ultimately helps fast and effective responses to evolving cyber threats.

Trend 2: Zero Trust Architecture

The “Zero Trust” security model will continue to evolve. This is where every user and devices is considered untrustworthy by default, until proven otherwise.

That means that testing and validation processes will apply for every user or device login. This approach helps mitigate the risk of internal and external threats.

Basically, every user and device has to continually verify that they are legitimate.

Trend 3: Cloud Security:

An increase in cloud adoption through 2024 will also mean a corresponding growth in cloud security solutions.

More integrated cloud security solutions are a natural part of protecting the cloud environment. They are also an important facet of banking technology security strategy, and will continue to be.

Trend 4: Blockchain-based Security

Adopting blockchain technology as a security solution will help ensure data integrity and transparency.

Blockchain effectively shuts off the tap for interference in the creation of the data records that underpin a given process. The lock security system will ensure optimal protection from unauthorised changes.

Trend 5: Increasing Mobile Security

Mobile devices are now an important player in digital financial transactions. That’s why financial services security is also focused on enhancing stronger mobile security.

Banking technology platforms are designed with strong encryption protocols. These will ensure data sent between devices is protected from unauthorised access. That includes bringing multi-factor authentication features, biometrics, and passcodes.

Trend 6: Biometric Authentication

As above, verifying the individual at the point of digital contact is a storing guaerantee of authenticity.

Authentication methods liike facial recognition and fingerprint scanning offer stronger security. This includes multi-modal biometric authentication that is also used to prevent forgery. There are banking apps that require occasional video recordings to authenticate by appearance and voice recognition to approve large transactions.

Trend 7: Changes in Privacy and Data Protection Regulations

Privacy rule changes will continue to evolve following as data protection requirements get stricter.

Banking companies will also follow global regulations that focus on consumer data privacy. Their clients will also have higher expectations of data security.

Trend 8: IoT Cybersecurity

The IoT (Internet of Things) ecosystem requires better security standards and device management in general.

Because IoT functions through the connection of physical infrastructure with the digital realm, penetrations of that infrastructure – especially through physical devices, require tough security measures.

Reducing the risks associated with unsecured IoT devices will be such a widespread trend that financial services security can rely on a huge body of evidence and best practice to control what attack surface is presented,

Trend 9: 5G Network Cybersecurity

The launch of 5G networks worldwide bring with them the network security expectations that any major shift in networking will create.

That  requires an emphasis on network security. Faster network speeds with lower latency creates new challenges that need to be solved. For financial services security, protecting IoT devices connected to the 5G network, ensuring infrastructure support, and mitigating the risk of vulnerabilities appearing where network breaks happen during authentication procedures are all areas of concern.

Trend 10: Cyber ​​Insurance

The cyber insurance market will see significant growth in the future.

Because cybersecurity threats evolve so quickly, assessing how to insure for will require totally new approaches across Insurtech, client-side decisions, and consumer protection.

This falls neatly into concert with the need for financial protection from cyber threats. Insurance will adjust to banking technology risks and the changing compliance environment that maintaining financial service security will now require.

Conclusion

Cybersecurity trends encourage banks to improve their security architecture. Old methods used to secure banking technology systems will most likely be ineffective as the demands on banking technology to evolve are inescapable.

Financial companies will need better financial services security capabilities – but they will be able to get them.  The industry will respond with more sophisticated security solutions to the increasing threat from cyberspace.