Is it possible to imagine cybersecurity separated from states in an actively developing fintech market? Perhaps, yes and no at once.
It is “yes” because of anonymous blockchain financial solutions that are not controlled and not regulated by states.
It is “no” because of cybersecurity relates to everything connected with state banknotes and securities, their legalization, control, settlement and everything that is in the legal framework of states.
Situation at the market
Traditional methods of protection, which many representatives of the classic financial system use, rely only on detecting and blocking attacks, but these methods are not effective enough. It is time for a new information security model, which takes into account the entire period of an attack: before, during and after. At the same time, the best approaches to building cybersecurity are those that make hacking and any data modification unlikely (literally prevent).
The National Cyber Security Index (NCSI) shows the cybersecurity situation of countries based on 12 strategic indicators. This is a global database containing links and documents on national cybersecurity. Compared to other indicators, the National Cyber Security Index is more transparent: every positive answer is backed with publicly available materials. Data for NCSI are provided by national cybersecurity officials and experts of different countries.
The picture shows the leaders of the rating from 47 countries. We will not go into details of the indicators since not all of them are related to the fintech theme. Although it is worth noting that many states, despite the serious international cyber threat, are not actively developing both fintech and cybersecurity, preferring to use an obsolete but “time-tested” system from year to year.
The opposite situation is observed in transnational banks and other large international financial institutions, which are actively investing in the development, purchase and implementation of fintech innovations. A vivid example of the point is Ripple, which convinced more than 100 banks to use blockchain. There is part of them here:
Is Ripple an alternative to SWIFT?
Ripple is a global transaction system that uses a unique Ripple Protocol Consensus Algorithm which provides a distributed ledger that is updated every few seconds and contains data about all transfers.
Many people seriously call Ripple an alternative to the current SWIFT because Ripple is faster and the commission is lower.
Ripple is one of many fintech solutions that are actively developing and, at the same time, meet modern requirements for cybersecurity.
Fintech solutions stimulate the development of cybersecurity
New technologies provide more security, they are faster and cheaper. At the same time, it is necessary to understand that the fintech cybersecurity is developing together with biometric authentication systems, cold storage technologies, encryption combinations and other solutions.
Let’s return directly to cybersecurity. If the Ripple service is aimed at the banking sector, other crypto projects are developed using anonymity and creation of a financial alternative to the current classical system.
Meanwhile, technologies are developing so rapidly that many business representatives and ordinary people who are unaware of fintech and blinded by the possibilities of new technologies do not have time to think about the consequences of their implementation. This is especially because of the anonymous market of cryptocurrencies, which is not regulated and controlled by states, as well as is a paradise for financial fraudsters.
Judging by the trends of last year, 2018 promises to be hot regarding cyber attacks. Increased interest of hackers is expected to focus on the cryptocurrency market. In addition to stealing directly from owners and through resources of intermediaries (wallet apps, exchanges, smart contracts, etc.), there are new types of fraud.
For example, some Android games or Internet providers secretly mine cryptocurrency via your devices damaging or destroying them (heating the phone, heating the battery, battery bloating, physical damage of the smartphone’s case and electronics). Be careful about the attacks on cryptocurrency exchanges in 2018, which brought the income of hundreds of millions of dollars for cybercriminals and huge financial losses for traders in 2017.
All this will form a high demand for digital solutions to ensure safe financial transactions, the safety of money and the minimization of losses. The cybersecurity fintech methods are being improved every day, and they provide new opportunities for both financial institutions and their clients.
Obviously, large banks have now the biggest advantage in the fastest growing financial market because they have sufficient resources to develop and implement innovations, all the necessary data about their clients, and they can use the entire set of advanced fintech solutions to provide better, faster and safer services.
Author: ASD team