Page 43 - Banking Finance May 2024

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new vulnerabilities so as to keep customer data all the times
and all the levels. It helps in minimizing the risks related to
system breaches, legal liabilities and reputational losses
along with financial losses. Performing penetration tests
regularly after every new update and integration helps in
minimization the risk of disruption by hackers.

To safeguard the consumers against those risks companies
put some data security solutions to make it more secure.
These may include biometric authentication, two factor
authorization, data encryption and real time alerts etc.
Creating additional layers for security reduces the security
Image source: www.cybertalk.org risk simultaneously it may affect user experience as it would
increase the response time, but companies need to strike a
Cyber Security and Data Privacy healthy balance between user experience and data security.

As fintech deals with sensitive financial data, the risk of cyber
threats is immense. Ensuring robust cyber security measures Market Competition and Customer
to protect the customers is utmost for continuing customer Experience
trust. Cyber security risks such as hacking, data breaches, Existing players pose several entry barriers by virtue of their
malware attacks and fraud can result in severe scale, expertise and access to resources. The fintech
consequences. It would not only result in regulatory actions industry is highly competitive and dynamic in nature as new
but also affect the brand image of the company. Fintech technologies are frequently updated with innovative ideas.
apps use integration between several applications. More The presence of numerous players offering similar services
integration requires more third party services and data makes it more complicated. Positioning and finding a space
exchanges which results in more opportunities for hackers in an overcrowded market space may be very difficult if the
to enter and steal the sensitive financial information which company is not offering very unique service which is scalable
may be exploited by fraudsters. and sustainable. Acquiring and retaining customers in such
a competitive landscape can be very difficult and costly. In
Fintech relies heavily on customer data. Building and
order to retain the customers fintechs usually deploy several
maintaining trust of customers while handling their data
strategies.
responsibly is crucial. Vulnerabilities are much more discreet
and impactful on users. On the one hand their money is at All these strategies mainly aim to improve customer
stake and on the other hand their personal data may also experience. Companies use artificial intelligence for service
be leaked. With increasing concerns about data privacy, personalization which filters services and products the user
companies need to navigate complex regulations and was interested previously.Personalization provides them only
reassure customers about their data security practices. with the narrowed options they are looking for. Companies
Since most of the fintechs work in digital environment extensively use big data and data analytics for personalizing
through apps and contactless platform, safety and security the experiences. However big data has its limitations as it
of digital identities becomes paramount. is presently scratching the surface only. Fintechs also try to
develop user friendly and attractive UI for gaining a
Data ownership is a safety measure put in place by competitive edge. Reward points and loyalty programs are
regulators. It refers to the authority structure within the also used extensively for acquiring and retaining the
company for creating, accessing, modifying and deleting the customers. Retention strategies may also be adopted
data. Security roles define the ownership of the data. through competitor analysis and consumer behavioral
Companies need to regularly update their security protocols studies which provide deeper insights in current trends and
to keep pace with ever changing digital environment and latent needs of the consumers.

38 | 2024 | MAY | BANKING FINANCE