Chia Hock Lai, President, Singapore Fintech Association,speaking at the Computerworld Security Summit 2017
The rise of financial technology (fintech) may result in increased cybersecurity threats and attacks, said Chia Hock Lai, President, Singapore Fintech Association, at the Computerworld Singapore Security Summit 2017.
He highlighted the five areas of fintech that introduce cybersecurity risks:
1. Rise of fintech startups
According to a report by Accenture and CB Insights, global investments in fintech rose from 2012 to 2016 to reach US23 billion. There are now many new startups providing fintech services, such as peer-to-peer lending, mobile payments, trading platforms, too.
While these startups heavily focus on developing fintech-related features for their products, they might not put in the same effort on the security aspect. These startups are thus more vulnerable to cyber threats as they do not have strong security measures, said Chia.
2. Collaboration with banks
More than a third (34 percent) of banks globally said they are open to collaborating with a fintech company, according to a study IDC did on behalf of SAP last year.
As such, some banks are allowing fintech startups/developers to access bank platforms (under controlled conditions) through application programming interfaces (APIs).
While this openness facilitates innovation and drives competition, it also creates an avenue for cyber attacks. Cyber criminals might use startups as their way into banking systems, explained Chia.
3. Financial inclusion
According to the World Bank Group, only 50 percent of adults in ASEAN have bank accounts. The availability of mobile or peer-to-peer payments from fintech startups will thus enable more underserved to access financial services, said Chia.
While this brings benefits to both the underserved and banks, it also increases cybersecurity risks. Since many of the newly banked have little to no previous experience with cybersecurity threats, they will be easier targets for cybercriminals to hack into their email or mobile devices to extract their banking details, explained Chia.
4. Big data and analytics
"[Gartner predicts that] in the next four years, the number of IoT devices [that will be in use in the consumer sector] will reach 13.5 billion," said Chia. With every device generating data, machine learning will be required to analyse the large amounts of data generated to churn meaningful insights.
But machine learning is a double-edged sword. Chia said that cybercriminals can use machine learning tools to read [users'] email interactions and accounts, and craft believable phishing emails that will trick users and their contacts to give out their personal information.
"Blockchain is a key technology which will shape the future of financial services," said Chia. According to Aite Group, banks will increase their investment on blockchain over the next few years to reach US$400 million in 2019.
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