Fintech companies can leverage advanced technologies like artificial intelligence and machine learning to detect and prevent cyber threats in real time, enabling proactive defence against potential attacks.
Fintech companies have become a crucial part of the financial services industry, producing products and services that allow us to bank, invest, manage our pensions, and more, all from the comfort of our homes. But while creating innovative products might be the primary objective of fintech firms, they also have a tremendous responsibility to protect themselves and their customers from the omnipresent threat of cybercrime.
Responding to the growing threat of cybercrime
According to a survey by Gartner, three-quarters of companies plan to adopt new solutions to help them counteract the cybersecurity challenges caused by new technology. This continuous investment is vital as cyberattacks are becoming increasingly sophisticated due to self-learning software and a growing reliance on Artificial Intelligence (AI).
However, while fintech firms need to be aware of AI threats, AI-powered technologies can also help to protect them. Voice biometrics can compare more than 1,000 voice characteristics to detect a user, while behavioural biometrics can measure details such as how users hold their devices to keep their customers safe. Biometrics also allow fintech firms to strengthen their defences without customers having to actively engage in the process, which helps to protect the user experience.
What damage can cyber threats cause?
South Africa is certainly no stranger to cybercrime, and in fact, recent research has shown that it has the third highest number of cybercrime victims out of any country in the world. Phishing attacks alone grew by 65% last year, with payment providers and banks being the most targeted.
There are numerous examples of the kinds of threats that customers and fintech firms have to be aware of. In recent years, TransUnion South Africa was the victim of a massive data breach, with 54 million personal data records stolen. And in 2021, Transnet was hit by a ransomware attack that encrypted a terabyte of personal data and financial records.
The role of fintech firms
In addition to implementing adequate protection, some fintech firms are taking the initiative to warn their customers about common cybercrimes and the warning signs they should be aware of.
In addition to implementing adequate protection, some fintech firms are taking the initiative to warn their customers about common cybercrimes and the warning signs they should be aware of. Wonga, an online lender, recently published a series of real-world cybercrime case studies to assist its customers in identifying these scams in practice. Sharing actual examples of how scammers target customers can be more effective in educating them than a theoretical warning. The published examples can be viewed online for free.
This socially responsible approach is something we expect to see much more of in the future. With cyber threats constantly evolving, improving awareness at the foundational level can help fintech firms and their customers stay one step ahead of cybercriminals and reduce the effects of cybercrime in South Africa.
However, fintech must go beyond educating their customers about potential threats. They need to proactively take the fight against scammers by implementing new and constantly improving technologies to give honest businesses and their customers the best chances of safety in an ever-evolving arms race that seems destined to continue forever.