Fintech Telecoms: Making Fintech Safer for You
In the digital age, telcos have become the natural partner of many industries, including the metaverse. Our interest in this article lies in the fintech sector. In a previous article, we stated why telecom companies are attractive to the fintech industries. Through such a partnership, these two industries hope to expand their services to the unbanked living in rural areas. In that same article, we also listed some dangers financial data may face. Fintech telecoms will have to avoid these issues to stay in the lead as fintech’s main partner.
Cloud Computing Security Issues
Traditional banks adopted agile technologies (highly adaptive processes that allow constant inspection and modification) to provide their core financial services to clients worldwide seamlessly. Therefore, the financial sector had to reconsider its strategy to support cloud usage for digital acceleration to cope with enormous change and harmoniously adapt to growing customer demands. As a matter of fact, cloud computing brings five things to the fintech table: agility, elasticity, customer experience, coast-savings, and faster deployment.
As this technology is becoming increasingly vital to many sectors, several telcos have been working on its implementation. And due to the sensitive nature of financial data, their storage needs to be done safely.
Fintech Telecom Contribution
Since the security risks could never be zero, the aim for telcos is to reduce these risks through key security imperatives including but not limited to the following:
- Implementing mitigations that neutralize known attack vectors.
- Protecting sensitive data through segmentation of workloads and storage.
- Encrypting data in transit and at rest.
- Tracking access and changes to the management layer.
Malware Attacks
Combining policies, best practices, security tools, etc., in an ideal world should create cyber-resilient nations with secure ecosystems. Instead of telling you how malware affects the fintech industry, I’d like to show you. In 2010, the Educational Credit Management Corporation, an American nonprofit corporation operating in the areas of student loan bankruptcy management and loan collection, was the victim of a ransomware attack ending with the exposure of around three million clients’ personal information (including social security numbers).
Fintech Telecoms Contributions
It is virtually impossible for any company to become The Tongwancheng of the digital age. They can, however, come very close to that goal. Fintech safety for telcos is twofold:
- Employee Training: Employees are the weakest link in any company. So, training them to identify and report security threats such as phishing emails is crucial to the enterprise’s overall security.
- Machine-Learning (ML) Technology: ML in security is an ingenious use of artificial intelligence (AI) as it can recognize communication patterns within the company and flag any anomalous and malicious activity.
Identity Theft
The fintech industry’s fraud landscape has changed over the past few years, especially during the COVID-19 era. Identity theft consequently rose to the top of this sector’s list of significant and frequent fraud types. In fact, when deep fakes and other deception methods were developed and then improved, selfies, which were once a standard tool for proving ownership, lost their legitimacy. Additionally, “facial biometrics identification” (liveness detection and determining whether the person on the other end of the camera is real) will also become obsolete as we go deeper into the digital age.
But the fintech industry Is not the only one to deal with this technological abuse. The telecoms sector is no stranger to it either. This fraud, however, is known to the telcos as subscription fraud, and they include the following:
- SIM Swap Fraud
- SIM Registration under a False Identity
- Call Diversion/Forwarding
- Mock-Provider Call to generate General Purpose Reloadable Top Up
These companies need to remain on top of this issue if they hope to be the primary choice of fintech partnerships.
Fintech Telecoms Contribution
Telcos will need to increase security if they want to have a reliable partnership with the fintech industries. Take a look at Zimbabwean telecoms firm Econet Wireless Zimbabwe Limited (Econet). The African telco introduced face, voice, and fingerprint biometrics to its Know Your Customer (KYC) system.
Final Thoughts
This marriage between fintech and telecoms could fuel exponential growth. Nevertheless, the fintech industry, by nature, handles very delicate personal information and financial data. So, any security breach, no matter how small, could be detrimental to the mobile operator and the fintech company involved but to you as well. This situation is a big responsibility on the big telcos’ shoulders. As for you as the consumer, you should be much more knowledgeable in your providers’ involvement with the fintech industry. Only some fintech telecoms companies out there correctly implement security protocols to keep you and your data safe. With that in mind, consider the company’s security if you desire to mingle your finances with the offers that fit you and your lifestyle.
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