, a renowned name in the fintech landscape thinks that in today’s rapidly evolving technological landscape, the path to progress lies in embracing digital transformation. As technology moves forward at an unprecedented pace and businesses amass, retrieve, and warehouse ever-increasing volumes of data, digital adaptation is becoming more and more important. Enterprises immersed in the realm of financial technology and specialized fintech entities are experiencing remarkable expansion.
They are weaving intricate digital webs and broadening their reservoirs of information. However, amidst this proliferation, a lurking menace known as ‘sprawl’ is emerging. When data sprawls across a large number of locations, systems, and networks, without a unified perspective, it greatly increases potential ransomware attacks. In this piece, you’ll get to learn about Michael Zetser’s thoughts on what fintech is, how it’s growing, and the important security steps businesses need to take to protect themselves and their valued customers.
Understanding What Fintech Really Is
Fintech, short for financial technology, is all about using new technology to make financial services better and more automated. It’s a broad term that covers everything from the technology running behind the scenes to the apps and websites you use for banking and investing. This even includes exciting things like cryptocurrency.
Under the big fintech umbrella, you’ll find things like business banking and online payments. Technology gives traditional companies the chance to upgrade how they serve their customers, making things more efficient and clear. But while fintech brings lots of opportunities, it also brings new challenges when it comes to keeping data safe. Companies in different fields, from finance to online shopping to education, need to watch out for cyber threats.
The Current State of Financial Crime
Fintech icon, Michael Zetser thinks that the growth of fintech has opened new doors for criminals. Fintech companies gather vast amounts of data, which they use to understand and serve customers better. However, this treasure trove of data is also a tempting target for potential hackers. The challenging global economic environment has further motivated these individuals.
Several factors contribute to this complex situation. The lingering impact of the Covid-19 pandemic, the ongoing Russia-Ukraine conflict, and escalating tensions between the United States and China have created turbulent economic conditions. To counter these challenges, central banks worldwide have raised interest rates to levels not witnessed in decades. As a result, both public and private markets have seen a slowdown and businesses across various sectors have faced difficulties in expanding their operations.
In challenging times, the importance of having a competitive edge becomes even more important. Understanding and harnessing new technologies is now a critical for businesses. Technologies like cloud computing offer accessible, cost-effective data storage and sharing capabilities. They empower fintech companies to offer sophisticated services to a much broader customer base than ever before.
However, the vitality of these technologies hinges on one essential factor: security. The same principle applies to various other technologies. It’s hardly surprising that financial institutions and fintech firms consistently rank cybercrime as one of their foremost concerns for 2023 and beyond. These concerns are well-founded, given the stakes involved.
Data Security Trends for Fintech to watch out for
Fintech expert Michael Zetser thinks that maintaining robust data security measures is an absolute must for fintech companies. Here is a look at some of the prominent threats looming on the horizon for fintechs this year.
While the term “Software-as-a-Service” (SaaS) has gained widespread recognition in recent times, “RaaS,” “HaaS,” and “AaaS” might not be as familiar.
Here’s a breakdown of what each acronym represents:
AaaS: Access-as-a-Service
RaaS: Ransomware-as-a-Service
HaaS: Hackers-as-a-Service
Much like SaaS, these acronyms signify that malicious actors can now access dedicated providers instead of relying on in-house resources for ransomware and gaining access. The availability and utilization of these “services” have seen a significant uptick. This, in turn, has lowered the entry barrier for cybercriminals. Michael Zetser, the professional fintech investor firmly believes that the era of the solitary hacker is fading, replaced by more elaborate setups that enable cybercriminals to launch attacks, such as ransomware, on businesses with greater sophistication and efficiency.
Blockchain Technology is the Future
A blockchain serves as a distributed database or ledger shared across the nodes of a computer network. While this term is most commonly associated with cryptocurrency, its advantages extend well beyond the realm of Bitcoin. Blockchain technology enables the creation and maintenance of unchangeable chains of data, ones that leave a trace if tampered with. In essence, it allows users to establish data trails that can be verified independently.
This gives rise to two significant advantages:
Transparency: Every user has the ability to track how and when the data was modified.
Efficiency: No user is required to seek validation from an external authority to verify the authenticity of the data.
Final Thoughts
While fintech expert Michael Zetser thinks that there are loads of other data security trends to watch out for in the world of Fintech, the ones mentioned above are among the most important and could revolutionize security in the financial technology world.