Startups today are disrupting the technological landscape. They have made people buy their stuff online, complete banking transactions online, find love online and even work online. Unfortunately, with systems moving online, they are also more vulnerable to the threat of malicious attacks by hackers and cyber terrorists. We hear of cyber attacks on major firms all too frequently, causing loss of data and money and diminishing the reputation of global brands. Especially for startups, it is the key to ensure that their cyber security is top notch, because they simply cannot afford a breach when they are scaling up.
The Year of Cyber Attacks – 2017
The past year has been particularly difficult in terms of cyber security. Global cyber threats like the WannaCry ransomware not only made headlines all over the world, but also brought institutions as big and crucial as the National Health Service of the UK down to its knees. The WannaCry attack thrived on a weak spot in the older versions of Windows operating system, revealed by a group of hackers under the pseudonym ‘Shadow Brokers’. Shadow Brokers also breached the NSA, gaining possession of some of the most sensitive information in the world. India was not exempted from being affected, being third in the list of worst hit nations, by the WannaCry ransomware. It affected as many as 40,000 computers within our nation itself.
Other major attacks included Petya, which targeted Ukraine’s Central Bank, causing havoc in the country and all around. The US Presidential Campaign of 2016-17 was mired with controversy over cyber attacks involving hacked emails, planted news stories, voter data breaches, etc. The most high-profile data breach happened at Equifax, jeopardizing credit details and information of an estimated 143 million citizens of the US. Entertainment moguls HBO were also attacked, compromising episodes of their most famous show, Game of Thrones. It seems safe to say that 2017 was the most unsafe year on record for all of the online industry.
The concern is how to patch all the weak spots. Someone somewhere will have a version of Windows that is not updated. Someone will naively click something that opens a Pandora’s box. Attacks are successful because they count on the one mishap which inevitably happens.
How to win your customers’ faith?
Only if FinTech start-ups have all the data secured, will they be able to sustain in the market and earn revenue. None of us would trust a start-up with our credit card or bank account details unless we are sure that it is going to keep my sensitive data safe. While they might win the trust of the millennials to add their details in the app, it’s a challenge to get the confidence of the older generations and the lesser tech-savvy people.
FinTech startups therefore need to build a strong and enhanced credibility system through excellent user experience. Its best to split up banking services into small sub sections and build the faith of customers in that small subsection first. PayTM started off with online payment service in 2014 and only when it gained enough trust and popularity, did it venture into online transactions, and then went on to become India’s first ever payment bank.
The likes of Microsoft, Google, IBM and Amazon have shown their initiative to capture the Indian BFSI and FinTech market by setting up their own secure systems in India. This has contributed to their sharp growth in BFSI and healthcare industries, among others. Earlier, due to strict laws against sensitive citizen data residing in servers outside India, it was very difficult to obtain these customers. The global tech giants have shown the way by ensuring Indian data remains secure and profitable for them at the same time.
How can FinTech Startups Secure their Data?
A data breach can kill a new brand. More than the money lost, the reputation often cannot be resurrected. Therefore, as a startup, you must bear in mind the importance of keeping security at the very core of your business plans right from the outset. Invest in a reliable anti-virus software before launching any platform, so that none of the data is vulnerable without any protection. On top of this techniques such as encryption to further protect the most sensitive data could be used. One of the most common forms of hacking is identity fraud, so startups must take care to ensure they have a robust authentication system for their customers and employees to prevent any malicious entry.
Practo, a healthcare industry start-up takes solid measures to ensure safety and security of their data. These include data encryption, to enable access only to the authorized receiver and the sender, storing data in servers compliant to HIPAA only and several other steps like these.
Most startups in their nascent stage are concerned with market shares, exposure and building their final platform, which is why the issue of security deployment tends to take a back seat. This is where they falter, because once the culture of taking security as an afterthought is propagated, it very often leads to the company lagging behind on security measures. You need to take your security seriously, and deal with any potential threat as effectively as possible.
Instead of the cold rivalry, regarding the doubt whether FinTech will kill banks altogether, it will be more profitable if FinTech start-ups and banks work together. Let us take the case of ICICI bank and the idea of iWork@home. When ICICI bank had faced a certain challenge in 2011, they entered into a partnership with a startup named CustomerXPs. Later in 2012, with the help of this tryst, they came up with iWork@home. This was a program that replicated the office environment at the homes of the employees. The program utilizes face recognition technology to ensure that the employee details are not impersonated. Fintech start-ups need to win similar trust from banks and insurance companies in order to win.
The Fintegrate Zone Conclave 2018
Data security is undoubtedly one of the biggest concerns of the rapidly progressing digital world. While we reap the benefits of emerging technologies, we also have to address the issue of security as a community. At the Fintegrate Zone Conclave – India’s largest fintech conclave to be held in Mumbai from 27th February to 1st March, 2018 – we will have experts discussing the latest strides in cyber security, the takeaways from a miserable 2017 and how they can be applied to bring better structures in, and how the average startup can move in the right direction by not just ensuring its employees take security seriously, but also convincing its customers that their security is of paramount importance.
Click here to book your seats. For details take a look at Fintegrate Zone’s website at http://fintegrate.zone/ and follow them on social media using the hash tag #FZ18.