Every month, there are more FinTech companies because people want to improve the customer experience, simplify processes, and keep up with global trends. The UK is a very important place for FinTech around the world.
New financial solutions are growing there with the help of both the government and investors. More R&D departments, corporate headquarters, and IT companies have moved to London in the past few years. Here we will discuss the challenges that this emerging sector is facing.
Address the Vulnerabilities in FinTech Systems
As more systems from different groups work together, cyber threats will grow. Interfaces between systems are a common source of these problems since two systems made by different developers can cause compatibility and security problems, especially with older technology.
This is a hard topic for people who make software. When engineers link two different systems together, it complicates the programs.
This makes it harder to discover all the places where danger could come from. Many fraudsters get into networks and accounts because people make mistakes. Targeted phishing is a simple method that is used. People get scammed when they open spam emails, download harmful files, or give personal information on fake websites.
For banking sector people to learn how to make sure their online financial transactions are safe, it is important to make them aware of the risks posed by cybercriminals and teach them about digital and financial literacy.
Current and Upcoming Obstacles for the UK FinTech
With more digital financial services, it’s easier for scammers to get their hands on sensitive information. Unfortunately, advanced cybersecurity is becoming more and more common for financial companies.
As it is a financial company, it might face a shortage of money in times like these because of illegal fund withdrawals. One option for a quick solution would be to go for very bad credit loans from direct lenders in the UK with no credit check. Just to be on the safe side and restore working capital in the short run.
The FCA says that about 46% of British businesses had data breaches in the last year. The UK Asset Management Trade Association IA has set up a cyber threat intelligence platform to deal with the problem. According to the LORCA report 2022, investments in cybersecurity companies in the UK have grown by an amazing 940 per cent. Here are two ways these breaches could be mitigated:
a. Application Security
FinTech programmes use the financial profiles of their users to make transactions in real-time.
Using application code is one way to get into financial networks. Banks and FinTech companies need a safe application security solution, like a VPN, to keep customer data safe. This should have a web application firewall with up-to-date threat intelligence to find and stop known and new threats as well as find and fix vulnerabilities.
b. Cloud Security
Cloud services offer ongoing performance that can be scaled up or down with lower start-up costs. Having a lot of point solutions makes it easy to move data, but it’s hard to see what’s going on in the cloud across different remote systems. Banks and FinTech companies need to make sure that the cloud is just as safe as their networks.
For this security to keep up with the growing use of the cloud, it must be not only able to find and stop threats but also be able to change and grow on the fly. Companies must also use internal segmentation and cloud access security brokers to protect financial data, make data more visible, and incorporate industry security standards.
2. Enhanced and Automated Intelligence
An integrated defence needs automated threat intelligence so that it can grow into a whole system. If banks and FinTech companies work together more often, it will be hard for IT teams to gather and analyse all of this threat data by hand in a timely manner. During this process, it will be very important to use machine learning.
Cybercriminals already use automation to make their attacks more effective and more likely to keep going. In the same way, when machine learning and automation are added to network security technologies, threats can be found and stopped in real-time so businesses can keep up with hackers.
If, by chance, your company faces a big loss and you need some amount on the same day as well, then you can go for same day loans in the UK.
3. Talent and Skills
Even though the UK and London are known for being good at FinTech, new technology trends require a larger talent pool and more specialised technical skills. Businesses know that they have to spend money on their employees’ growth and research if they want to stay on top of their markets. All over the world, people who are good at data analytics, machine learning, and cybersecurity compete with each other. In 2021, these jobs made up 15% of all jobs in the financial services field. They are expected to make up 29 per cent by the end of 2022.
Most UK FinTech companies are trying to build up a talent pool in the UK, but many large companies look outside of the UK to find the skills they need. The government is trying to change how schools work so that more graduates will start their own businesses.
It’s also trying to set up incubators and other extracurricular activities to help the FinTech industry learn what it needs to know. These are long-term solutions that could have an effect on the market in a few years.
4. Human Error
Even though cyber security has gotten better in the past few years, cyber-attacks are still a problem for businesses all over the world. Companies put a lot of money and time into making their technology safer, but they forget about the security of their employees. Even the best security technology is useless if people don’t know how to use it.
People make most of the mistakes that cause problems with cyber security. A lot of the time, hackers get into a company’s important data and encrypted channels because someone made a mistake.
IBM says that 95 per cent of all security holes are caused by human error.
The number of FinTech companies is growing at a very fast rate. One reason for this growth is that they offer different ways to deal with money than what most people do. These options are easier to use, provide better services, and improve the user’s experience. FinTechs can help a business do better, make more money, and give better service to its customers. FinTech companies help businesses improve their online products and deal with problems in their industries, such as processing credit cards, sending money, and processing loans.
With all the new technology that has helped the FinTech industry grow, developers and organisations face huge cybersecurity challenges, such as threats that could lead to major data breaches affecting millions of clients worldwide. These companies need to enhance their security protocols if they want to keep growing and reduce cyber attacks.