Extortion, fraudulent transactions, denial of service threats, and credit card fraud, have increased as a result of the development of digital wallet options. Several cyber-attacks on the financial industry have already resulted in serious damage to crucial economic infrastructure. Some of the most well-known targeted crucial economic infrastructure. These assaults can compromise important company data, which has a detrimental impact on services, in addition to causing hardware damage.
Nearly every component of the FinTech ecosystem is likely to be impacted by a cybersecurity threat, either directly or indirectly. They could jeopardize financial institutions, FinTech businesses and users. Similarly, technology developers must be mindful of cyber dangers that could jeopardize the technology they are developing.
There are several cybersecurity dangers in FinTech, and this article identifies different types and actors responsible for them, as well as threat modelling methodologies used by financial institutions to mitigate countermeasures.
The Threat of Cyberspace
We've seen data theft, malware, denial of service, and cyber fraud, among other sorts of cyber dangers, in the field of financial technology. In terms of hazards and cyber risks, data breaches and distributed denial of service (DDoS) are the two most common attacks on FinTech companies around the world.
Cyber-attacks have been launched against financial organizations and banks all around the world. There have been reports of recent cyber-threat attempts.
Twitter accounts being hijacked for bitcoin (US)
dForce cryptocurrency (China)
Ransomware attacks (US)
GoldenSpy malware in tax software (China)
Scotiabank data breaches (Canada)
DDoS attacks (Europe)
DDoS extortion (Australia)
Types of Threats
For FinTech startups, cyber dangers are common, and this section identifies the most serious cyber concerns.
Malware: It is a type of malicious software that is designed to damage, disrupt, or gain unauthorized access to a computer system in order to steal sensitive information. Adware, Ransomware, Scareware, Riskware, Trojan horse, Spyware, Virus, Worm, and Zero-day malware are among the several types of malware.
Adware: Adware is a type of virus that shows unwanted adverts on the user's computer screen. Adware tempts the user to click on flashing advertising that promises profitable products.
Ransomware: Ransomware encrypts data on a machine, rendering it inaccessible to users, and demands a ransom in exchange for access to the decryption key.
Riskware: Riskware is a valid programme that can compromise the device's security. Despite the fact that it is legitimate software, it is used to steal data from the device or redirect users to dangerous websites.
Scareware: Scareware's goal is to instil fear in consumers' thoughts in order to persuade them to download or acquire harmful software.
Spyware: Malicious software such as spyware can gather sensitive information and pass it to advertisers, firms, or external agencies once installed on the device.
Trojan: Trojans are sneaky impersonators that mimic legitimate programs and steal the data from the device in the background.
Virus: In the computer world, a virus is a program that duplicates itself by altering other programs and inserting its own code.
Worm: A worm is computer software that replicates itself and spreads to other computers without the use of a host programme. Worms infect other machines in the network with a target machine.
Zero-day: An unknown vulnerability is called a zero-day vulnerability. When a vulnerability is unknown to the security community and a malicious application is created to exploit it, this is known as the zero-day period.
Data Breach: A data breach occurs when confidential or sensitive information is leaked intentionally or unintentionally to an untrusted party.
Denial of Service: A denial of service attack is one that targets an entire computer system, network, or server to render its services unavailable to legitimate users.
Distributed Denial of Service: The Distributed Denial of Service (DDoS) has been described as a type of targeted and lethal attack involving multiple hackers and compromised systems.
Threat actors: Individuals or groups performing cyber-attacks against organizations are known as threat actors. While the people behind the attacks are the same for every organization, financial institutions have a dedicated group of attackers.
Following is a list of prominent threat actors that have targeted the financial sector:
Malicious insiders: They are those with the authority to view, write, and transmit sensitive private and proprietary data held by a financial organization, particularly a bank. The average cost of a data breach, according to the IBM Cost of a Data Breach study for 2020, is $6.71 million, which includes both system failures and human error. Furthermore, the average cost of a cyber incident across all industries is $4.37 million. In 2008, a clerk at HSBC bank's London headquarters fraudulently wired ?90 million to Manchester and Morocco accounts.
Hacktivists: A hacktivist is someone who engages in malicious behaviour in order to misappropriate a computer system or network for political or religious purposes. Hacktivism is the term for this type of action. Hacktivists, often known as hackers, organize groups of people and work together to conduct a political cyber-attack against financial institutions. In 2016, a group of unidentified hackers launched DDoS assaults against the Bank of Greece's website, as well as the central banks of Kenya, Mexico, Panama, and Bosnia and Herzegovina.
Cybercriminals: Cybercriminals are individuals or groups who use technology to engage in destructive activities on digital networks or systems in order to steal sensitive data for financial benefit. They frequently trade illegitimate items and services on the dark web, such as illegal firearms, drugs, restricted pharmaceuticals, and adult content. In 2019, cybercriminals stole $100 million from over 40,000 victims, including banks, law firms, multinational enterprises, small businesses, and nonprofit groups, using the GozNym malware.
Nation-states: A nation-state actor or state-sponsored actor is well-funded and sophisticated. Government entities sponsor them. The NoPetya ransomware outbreak in 2017 was a recent example of nation-state attacks. NoPetya is thought to be the speediest virus in history.
Cyber terrorists: Those who engage in cyber-terrorism carry out malicious activities in order to disrupt the critical infrastructure of a target. Cyber terrorism is considered to be the new cyberwar. NoPetya and WannaCry ransomware are classified as cyber-terrorist acts.
Script kiddies: Beginners or unskilled people who are lured into cybercrime activities are script kiddies.
Cyber threat modelling is a technique for identifying, categorizing, and evaluating cyber risks in FinTech firms. The major purpose is to identify potential risks that could take advantage of the FinTech institution's flaws and cause enormous losses. As a proactive or reactive strategy, it aims to limit vulnerabilities and their influence on FinTech institutions.
A defensive method, often known as a proactive threat modelling technique, tries to defend FinTech institutions from cyber-attacks. Early warnings and resource protection can be sent in order to predict cyber dangers. It is, however, impossible to anticipate all cyber risks in real-time.
A reactive threat modelling technique, often known as the adversarial approach, involves taking necessary actions to avert a cyber threat. This includes tactics such as ethical hacking and penetration testing. To simulate threats, FinTech institutions concentrate on attackers, assets, or software. The right structural strategy will be determined by the size, nature, and amount of investment in FinTech.