Paredaim Plus

What to Do if Your Fintech Company Faces a Cyber Attack

Paredaim Plus
Top Cybersecurity Risks Facing Nigeria's Fintech Companies

Fintech has been on the rise across Nigeria’s financial market within the past decade as the country’s population embraced payment, mobile, and financial inclusion services. But if the financial services sector has shifted gears towards digitizing everything it possibly can, then this comes with a unique set of problems that were not previously seen by the industry—especially the issue of cyber threats. With more persons in Nigeria now adopting online banking, and mobile money among other Fintech solutions, the risk for Cyberattacks remains inevitable.

In this blog post, we are going to look at the most significant threats to Nigeria’s fintech businesses, consider how these threats influence the industry, and advice for fintech companies managing these threats for secure operations.

 

1. Data Breaches and Unauthorized Access

That brings us to one of the biggest security threats to Nigerian Fintechs, which is data loss. Fintech platforms comprise a huge volume of customers’ data that may contain personal details, financial data, and transactions, among others. However, if a breach occurs, this information can be seen by cybercriminals which will result in loss of money, identity theft, and reduced customer trust.

It is also a best practice for every Nigerian fintech to adopt the following measures as part of its data breach protection policy; data encryption will be adopted and implemented for that information, multi-factor authentications, regulated and restricted access to systems and information.

 

2. Phishing Attacks

Phishing techniques remain the most popular deceptive methods used by hackers to perpetrate fraud on fintech enterprises. In Nigeria, the trick usually comes in the form of emails or short messages that are designed to lure the target into parting with their login details, or cash. Once the attackers get into the system, they can move around in the accounts, embezzle or otherwise siphon off funds, or report the data on the dark web market.

Fintech firms are also required to engage their personnel in training to educate them about phishing risks and also to educate their employees and clients to avoid them. Hence, conducting thorough reinforcement of the email filters and organizing secure communication could also hamper the attempts of Nigerian phishing attacks in the sphere of fintech.

 

3. Mobile Banking Vulnerabilities

The availability of mobile banking in Nigeria has enhanced the improvement of financial services, especially among the under-banked population. But with the increased uptake of mobile money and banking apps, there is always a high risk of cyber attacks. Laptops and especially mobile devices are especially exposed to malware, SIM swapping and unauthorized access.

To counter such threats, Nigeria’s Fintech firms have to offer the bank via mobile devices security by incorporating end-to-end encryption and updates into its apps and including biometric authentication tools as well. Furthermore, there is a need to raise awareness among users regarding their mobile devices' passwords and avoid using unfamiliar Networks Wi-Fi.

 

4. Digital Payment Fraud

The security of digital payments is a critical issue in Nigeria’s fintech business. The attribute is an appeal to criminals who attempt to hijack transactions or take advantage of vulnerabilities in the system to get unauthorized access to money. As the usage of contactless payments and e-shops rises, fintechs need to pay a visa to fraud.

The use of biometrics especially in tracking patterns of transactions and issuing alerts when they notice suspicious transactions is crucial when dealing with digital payments in Nigeria. Furthermore, tokenization that involves the substitution of some forms of payments, for example through the use of cards, means that online payments can be a little more secure.

 

5. Ransomware Attacks

Ransomware attacks are on the rise, especially in the financial sector, fintech inclusive. Organized intruders deny users access to important systems or data, or lock that information within a program, and then demand a payment—usually, in Cryptocurrencies—to release it. As it has been observed, such disruptions are capable of producing financial and reputational impacts on the operations of fintech companies.

The best way to combat ransomware is to have a rigorous backup system in place for all the data that a fintech organization handles; backups have to be maintained off-site and up-to-date. Also, new technologies of endpoint detection and response can prevent ransomware attacks and eliminate threats before they become active.

 

6. Third-Party and Supply Chain Risks

Most fintechs also depend on third-party service providers including cloud solutions, payment facilitators, and software solutions providers. However, these partnerships create new supply chain risks that threaten the security of fintech activities as a whole. Holding data with a third party exposes fintech companies to risks that are outside the area of direct control.

Third-party risks must, therefore, be minimized by Nigerian fintech firms performing vendor risk assessments to guarantee compliance by the partners with good cybersecurity policies. Other are clear legal relations and roles and responsibilities in the supply chain regarding cybersecurity, audits and continued monitoring as well.

               

7. Regulatory compliance problems

With the advance of fintech in Nigeria, there is a need for close adherence to cybersecurity standards. In the recent past, the Monetary Authority of Nigeria commonly known as the CBN has issued various policies towards the sector to enhance the security of the streams. Noncompliance with these practices exposes organizations to considerable penalties as well as legal actions and a tarnished image.

Fintech firms must also ensure that they adhere to the various regulatory requirements that apply to it and this is by ensuring that they become aware of the latest cyber security laws and regulations. Contacting cybersecurity specialists and other consultants can significantly help the company perform through the legislation and maintain the necessary security level.

 

8. Distribution Denial of Service (DDoS) attacks

Another risk in Nigeria is the Distributed Denial of Service (DDoS) attacks on the fintech platforms. These attacks inundate a website or a specific platform with too much traffic so that the site either becomes slow or even unresponsive. The likes of fintech firms that heavily rely on real-time transactions are on the receiving end as DDoS attacks cost them huge losses and greatly affect their brand.

How does one protect oneself from DDoS attacks Fintech firms can employ the use of modern, efficient and secure web application firewalls (WAF) as well as cloud-based solutions that offer the scalability to handle the volumes of traffic. Also, having an effective incident response plan in place helps ensure the companies’ ability to rebound from such assaults.

 

Conclusion

That is why as Nigerian fintech companies continue to push the agenda of financial inclusion and innovation, it is imperative to underline the need to have a good cyber security system. Cyber attackers find industries a rich hunting ground for growth and the aftermaths of a cyberattack are always disastrous for enriching the company’s loss both in terms of money and reputation.

To counter these risks, Nigerian fintech firms must take novel measures to bolster cybersecurity investment in new generation technology, awareness among employees as well as levels of industry regulation. To reduce possible threats that can hinder the future of Nigeria’s fintech, it is necessary to focus on four critical threats including data breaches, phishing attacks, and mobile banking threats.

Concerning the current and future state of the online world, the protection of customer information, security of online transactions, and trust all play an important role in the survival of such business models. Fintech firms that invest in cybersecurity will prevent risks that might bring the downfall of their business and create a competitive advantage that encourages the user’s trust, enhancing financial technology in Africa.