Fintech has been on the rise for many decades, but most consider PayPal’s massive success within just a year of its arrival to be the key point when financial technology and automation in financial services really started disrupting the scene. Back then, fintech was still seen as something that would create unrest within the industry, and as a result, the rise of fintech was not an easy path. More than 20 years later, however, thanks to the rapid advancement of technology in hardware, cloud computing, and intelligent automation development, fintech has proven itself to be an extremely welcome disruption that ultimately managed to save the market. Even then, all that digitization does not come without its own caveats, unfortunately, as we will see later on in the post.
How Fintech Saved the Market from Covid-19
To understand how fintech saved the economy and the market from coming to a complete halt during the lockdowns, all one needs to do is take a look at how they conducted their financial operations during and after. To put it in simple words, fintech includes all banking and other financial services that allow the institutions, their employees, clients, and customers to interact with the system, without having to meet in person. Given that the biggest precaution and mandate to prevent Covid-19’s spread was social distancing, fintech allowed banks, stock markets, and all other financial institutions/systems to remain remotely active throughout it all. In absence of the technology that is there today, the loss of lives and the financial losses would have been inconceivably worse for the entire globe.
It’s Important for Everyone to Understand How Extensive Fintech Is
It can be stated without a shadow of a doubt that anyone who lives and works in modern society uses facilities brought forth by financial technology, in one way or the other. To provide a better and more clarifying idea regarding how extensive fintech really is, let’s take a look at some of the major financial segments and processes that are critically dependent on fintech.
- Banking processes
- Online banking and transactions
- Card transactions and contactless transactions
- All eCommerce related online transactions
- Wealth and financial management
- Private, corporate, and personal financing
- Capital lending
- Cryptocurrency exchange, trading, and blockchain technology in general
- Online stock trading, forex trading, and the associated processes
- Certain processes within the insurance segment
- e-Wallets and associated transactions
- All automated or semi-automated financial processes, which includes everything from credit assessment to automatic debit functions
This is not the full list, but it serves to provide us with a better understanding of how closely fintech is associated with almost everything financial today, be it on an industrial or personal level.
Fintech and Consumer Security: A Serious Consideration
Technically, the definition of fintech or financial technology states that it includes any piece of tech that is used to aid a function related to finance, be it from the client or customer end. Therefore, the biggest problem with automated and digitized financial management is the uncertain nature of cybersecurity. This presents the question; if a company as big as Yahoo cannot protect itself from being destroyed by hackers, how safe are we as average users of fintech?
500 million+ email accounts were hacked during the infamous Yahoo data breach, back in 2014. When data regarding an even earlier hack from 2013, which had exposed the private account information of over a billion users came to light, Yahoo was done for. As if this was not enough, the final nail in the coffin of the multibillion-dollar US company was neatly hammered in when Yahoo publicly admitted that all 3 billion+ Yahoo accounts were compromised.
Given that a majority of those accounts were also connected to various financial services, there is no telling how dearly the Yahoo data breaches have already cost its users over the following years. From PayPal to local banks, every financial entity asks for an email ID to even create an account with them, and given how popular Yahoo Mail was back then, it is not difficult to discern what it meant for billions of people around the globe. If anyone still has an active account with them, it is strongly advised they learn how to delete Yahoo account information completely, in order to keep their private information secured. The linked guide was posted by Setapp and the post is not just a short guide that simply lists the steps necessary for deleting a Yahoo account. It also provides a lot of information regarding simplifying, unifying, and securing all accounts online, for a seamless and much more secured experience.
Cybersecurity Measures: Essential for Fintech
All cybersecurity measures related to financial technology cannot be taken alone from the business end, although, that’s where the bulk of the responsibility lies. Although breaches are still happening and the threat of cybercriminal activity is always a big problem for fintech, increased awareness has led to a decrease of major security breaches in roughly the last two years. Large enterprises have clamped down on their security measures by updating their cybersecurity systems to stay in sync with the latest security updates. From national governments to multi-billion-dollar corporations, they now have their own white hat hackers, protecting the integrity and security of financial systems online. The problem is, SMEs in fintech have now become the prime target of cybercriminal organizations, given that they usually do not have the same level of security measures in place as the big guys do.
As for the average customer, it is surprisingly easy to maintain their own financial safety online. All they need to do is make sure they access their fintech services from secured computers/tablets/smartphones only. The likes of McAfee and Norton provide complete online and offline (USB ports) safety these days, so a comprehensive solution from a proven cybersecurity provider and updated awareness are all that is needed to secure any smart device. In general, it is a good practice to keep one’s personal financial accounts unified and tied to just one or two devices at a time.