3 Critical Cybersecurity Trends in the Financial Sector

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When it comes to adopting the latest technological disruptions, the financial sector has to be one of the first to experience the benefits. It’s also the first casualty of the latest cybersecurity threats that come around each year, costing banks and other financial institutions billions of dollars in losses through data sabotage and data theft. 

As new tools provide higher levels of convenience for consumers in the financial sector, there’s no doubt that cybercriminals will employ more sophisticated means to cause data breaches and steal sensitive user information. Fortunately, the sector is fighting back and beefing up its defenses as institutions zero in on the latest cybersecurity trends, a few of which are listed below:

1. Zero Trust Security

While this is nothing new in the cybersecurity community, zero-trust security is becoming more prevalent as digital banking becomes more widespread. This approach to cybersecurity runs on the assumption that no one is to be trusted online and that access can only be granted to individuals who own or control an account directly. Going beyond two-factor authentication, a zero-trust approach would also analyze devices and list down users who have already used the account.

Aside from digital banks, other financial institutions are putting a premium on zero-trust principles by reaching out to third-party cybersecurity providers. Features such as multi-factor authentication and data encryption are central to a zero-trust system but real-time monitoring of user activity and regular security audits can also be included.

To complete this set-up, organizations must provide adequate training and orientation to new and existing employees, especially when it comes to the effective handling of account credentials and hardware. 

2. Rise of AI and Machine Learning

The emergence of generative artificial intelligence has raised both excitement and questions as industries race to harness its benefits. In the world of financial technology, AI and machine learning platforms are being incorporated as features of personal finance apps, allowing users to make more informed financial decisions.

Beyond the consumer market, enterprises are also using AI-powered tools to improve accounting systems and develop more effective business financing strategies. There’s more that AI can do, and it could provide consumers and enterprises better protection against online fraudsters.

In addition to these benefits, AI can also help improve the cybersecurity capabilities of banks, payment gateway, and other types of service providers. Through machine learning, they can identify potential gaps in their security infrastructure and generate valuable insights for closing these gaps to prepare for more advanced attacks in the future. AI can also implement rapid response procedures in the event of a breach, reducing further damage and preventing the exposure of sensitive client data.

3. Advanced Identity Verification

Too many times has the financial sector dealt with cases of fraud in which hackers steal client login credentials to gain access to financial platforms. New technology is being developed to provide financial clients with better security. Considering how easy it has become for hackers to conduct brute-force attacks on online banking accounts, advanced user authentication methods are now accessible, even to small enterprises.

One of these methods involves using a card scanner API that allows consumers to securely capture credit and debit card details without exposing such information online. Not only does this provide another layer of security alongside two-factor authentication but it also provides added convenience to financial transactions. What’s more, having such authentication procedures in place helps deter and block hackers from doing any more data and privacy damage.

Endnote

Technology is evolving at a rapid rate and the financial sector isn’t lagging behind in developing new defenses. In the face of more serious cyber threats, it matters for the industry to adapt to the most critical cybersecurity trends today.