Why fintech data privacy is a priority

The days of hackers stealing and bargaining with information haven't gone anywhere. And, the physical security of data servers is still paramount. Businesses and their fintech solutions must implement robust controls and processes to ensure secure data exchanges between the providers and the end-users.

More and more businesses are turning to software-powered financial solutions, which makes sense. The more processes you automate within your business, the more you can focus on high-priority tasks that translate into company growth and competitive advantage. But, the question for CFOs should always be twofold: 1) Is it safe? 2) Will it save us productive time?

Why is security important?

Trust between providers and customers is key to building stable and lasting partnerships. And trust is, of course, crucial when it comes to how and who handles your finances.

If a customer's data is compromised, the security consequences can be severe. A data leak could result in unregulated admission past the bank's monitoring structures, and consequently, harmful activity and even financial losses. A fintech, who bridges the gap between customers and traditional banking, has a responsibility to protect its customer's data to avoid this scenario altogether.

For financial institutions and fintechs, trust is vital. If a data leak were to occur, the impact and loss of credibility could be very damaging. The legal implications would be massive too. A violation of the GDPR directive, for example, could result in colossal fines and even lawsuits.

Awareness vs. practice

We've predicted some of the biggest fintech industry trends of 2022, and the growth of this space shows no sign of slowing. Fuelled by time-saving automation and transparency, the industry's growth extends to scaleups, SMEs, and Enterprises. The ongoing COVID-19 health crisis also prompted new digital-first tools and solutions to emerge rapidly. Fintech actors are growing like mushrooms.

Yet, do all of them invest in security? Unfortunately, In a startup market full of competitors, some actors focus more on value proposition than they do on safety and data protection. While legacy banks move slowly in terms of product development, they do tend to stick to traditionally controlled legal regulations to enforce tight control. The real sweet spot is a fast-growing fintech with both speed and agility and watertight data-protection rules and controls. Enter Payhawk.

As a fintech company that's developed a world-class expense management tool, we prioritize our customers' data protection. Our credibility is built on how we let our customers spend — and manage their spend. Therefore, safety starts in the backend of our platform. Safety and data protection are major priorities for our team, and they're integrated into the way we build.

At Payhawk, we use Amazon AWS and Google Cloud Platform GCP for data center hosting to ensure the high-performance and safety of our service. And, we've implemented a robust QA process to guarantee an undisrupted expense management experience. Learn more about our fintech security practices here.

Routine threats you should be on the lookout for

We mentioned above that many fintechs have direct access to conventional banks or store the same valuable customer information. This access makes the industry especially enticing for intruders.

There are many hazards for the industry to navigate then, so what are the most common?

Malware: Cyberattack through malicious software aimed to either undermine computer systems or steal data. Various types of malware have different purposes, e.g., ransomware hijacks sensitive input and encrypts it, making it inaccessible to the initial owner. The latter usually has to pay to gain control of the information again.

Phishing: One of the most popular and effective scams. Again, the purpose is to nudge unsuspecting victims to share confidential information with cybercriminals disguised as legitimate sources. According to Tessian, phishing is the cause of around 90% of data breaches, which shows that prevention proves difficult regardless of the widespread awareness of such fraudulent activity.

 

All of these hazards sound scary. And even more so if you're responsible for a growing business. Luckily, our team can support you when it comes to company cards, expense management software, and spend transparency. Security is woven in everything we do, from building an unparalleled expense management tool to managing data within the team.