As the possibilities offered by fintech to users grow, so does the concern about data leakage. Although they are revolutionizing the banking industry, financial start-ups deal with this major challenge every day.
According to research published by the Journal of Data and Information Quality, between 2018 and 2019 alone, there was a 493% growth in cases of data leakage in Brazil. The number is quite worrying, since every day, new forms of scams and fraud emerge in the online environment, making several users as victims.
Because they deal directly with sensitive user data, fintech need to be prepared to protect it against cybercriminals. Understand what measures can be taken by start-ups in this regard.
What is data leakage and how does it happen?
For those who think they don’t need to worry about the disclosure of their personal information, since they have nothing to hide, better rethink this concept. According to the Cyber Crimes Act, data leakage is considered a crime, which consists in the illegal access and propagation of private information.
This is due to the action of the notorious hackers, who break into databases to gain control of confidential materials. Among these are customer registration information, personal data of company employees, and even users’ bank records, such as passwords and credit card numbers.
The higher incidence of people using the internet in recent years has meant that cases of this type of cybercrime are occurring more frequently. In actions such as phishing or constructing fake forms, hackers are able to attract victims who are not yet so skilled in the online environment.
However, most of the time, the crime is facilitated by the lack of security of the companies’ own databases. Whether by lack of proper authentication of access, or even by errors on one of the pages of the system, the user information is exposed to the action of criminals.
As a result, thousands of individuals are morally or financially damaged after their data is leaked. And those who think this is a problem for start-up companies are wrong. Giants in various industries have already made news due to this type of problem.
What are the risks of data leakage?
You can see by now that the problem caused by data leakage is quite critical. However, it is important to be aware of the consequences that this crime can have for companies that have been hacked.
Sanctions
Following the implementation of the LGPD in Brazil in 2020, the security of sensitive personal data has undergone a process of review. To comply with the provisions of the law, companies had to reassess how they collected, stored, and handled user information.
However, for those who have not yet managed to guarantee greater protection for their databases, the law provides for sanctions that can be applied in cases of leakage of confidential material. The punishments can range from warnings to fines of R$50 million, depending on the damage suffered by the owner of the information and the measures taken by the company in relation to it.
Fraud and scams
After gaining access to users’ data, cybercriminals also perform other illicit acts. These are called scams, which harm both individuals and companies.
The frauds range from extortion of people close to the user to requests for financing and purchases made in the name of the data owner.
Loss of credibility
The basis of the relationship between customers and companies is trust. Especially when this relationship involves the granting of sensitive data.
Therefore, in cases of data leaks, the target companies tend to lose credibility with users, who do not feel safe providing their information.
How can fintech avoid data exposure?
Among the consequences of data leakage mentioned above, all present a great risk for fintechs. Because they deal with users’ personal and banking information on a daily basis, they need to be seen as credible and secure institutions when it comes to handling confidential material.
Therefore, it is worth investing in some preventive actions regarding data leakage.
Constant monitoring
This process allows you to identify possible vulnerabilities and threats to the fintech system, blocking with more agility the actions that harm the storage of customer data.
Relying on the advice of a company specialized in technology can be crucial to ensure control over the health and safety of the platform.
Privacy policy
Besides being a basic prerequisite for any website or online platform, provided by the LGPD, the privacy policy can help fintech in controlling access to information collected from users.
To avoid data leakage, it is important to determine which files and processes can be accessed, changed, or viewed by certain groups of users. This helps to decrease the number of people who have access to the information.
Data protection technologies
Some technologies have made it possible to ensure greater security for data shared in the digital environment. Among the main ones used by fintechs are encryption and blockchain.
As they make it difficult to read the information, these techniques help prevent hackers from acting, especially in the appropriation of banking data.
Updates and backups
The less vulnerable a system is, the lower the chances of being hacked. In this sense, it is essential that fintech have a routine of updates and backups of information to mitigate possible errors or problems.
The implementation of outsourced agile squads can help keep these procedures up to date and very effective.
Being up to date with the necessary security to prevent leakage of user data is fundamental for any fintech that wants to consolidate itself in the market. For this, more than the use of technologies, it is important to develop a culture of investment in specialized security technologies to avoid potential problems.
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