hsm fintech

Cybersecurity in the business processes of Fintech companies- Finnosummit

The arrival of Fintech in the new financial ecosystem driven by Digital Transformation is key to understanding the new economy.

In this scenario, cybersecurity for the protection of both Fintech assets and customer data is an essential requirement to strengthen their presence and prospects as a business.

REALSEC, aware of the importance that encryption through HSM has in these processes, will be present at the third edition of Fintech Innovation Summit, where Diana Guzmán, Country Manager of REALSEC Mexico, will deliver the speech “How to protect financial transactions in a regulated market: Fintech and CNBV of Mexico” on November 25 at 16.55 (Madrid time), 9.55 (Mexico City time), within the topic of Cybersecurity and Digital Transformation.

You can read our article “Cybersecurity in Fintech Business Processes” below:

Today, no one can question that the Digital Transformation, whose growth was boosted after the beginning of the pandemic, has come to stay, and become part of our lives, being the financial sector and methods of payment one of the most influenced by this digitization. According to data from Infosecurity México, it is expected that 55% of payments will be made cashless through Fintech platforms during 2021.

We are witnessing the rise, innovation and consolidation of financial technology institutions, new financial digital players focused on digital banking, blockchain/crypto payments, financing, payments and remittances, transfers and Insurtech … that are characterized by agility and convenience when making transactions and payments, while offering customized products and services to their customers. Without forgetting that the creation of secure environments associated with these services is essential to their strategy and efficiency, in short, to their survival.

In the current market, we find different types of Fintech, from “Big Tech”, represented by large technology companies such as Amazon, Facebook, Google, Apple, Baidu, Alibaba, and Tencent; as well as other Fintech whose services are oriented to the end consumer through neobanks and other models, Banking as a Service (Baas), Banking as a Platform (BaaP), among others, crowdfunding, etc.

A common denominator for all these types of Fintech, as is often the case in the financial field where the main critical asset is money, is that they are also targeted by cybercriminals to launch ransomware attacks, phishing, and theft of sensitive information. For all these reasons, the implementation of robust cybersecurity solutions and policies for the protection of the data they handle is key to the risk-free continuity of their business.

HSM encryption for cybersecure Fintech

Within the framework in which Fintech operate, identification and authentication of their customers for transactions is fundamental in the built of trusted environments and the minimization of digital fraud.

A simple weakness in a mobile application or an unencrypted transfer is a risk of fraud and improper exposure of customer data. With the threat that information such as PIN code or CVV can fall, with impunity, into the hands of cybercriminals.

Against this backdrop, if we want an optimal securitization of these processes, investing in top-level hardware security and opting for an HSM (Hardware Security Module) in the field of Methods of Payment for data encryption is undoubtedly the safest and most reliable option we can choose to prevent and mitigate the risks of fraud in the financial sector.

An HSM (Hardware Security Module) is a device based on cryptographic hardware, responsible for the protection and security of sensitive information and critical assets through the generation, storage and custody of symmetric and asymmetric cryptographic keys associated to digital certificates responsible for encryption, decryption and authentication of the digital signature in operations where there is hardware acceleration for fast and secure processing of information, such as processes associated with different transactions and payments offered by financial technology institutions.   

In addition, its TamperResistant and Tamper-Responsive security mechanisms ensure that the compromised information contained in the HSM is erased if possible tampering and/or sabotage attempts, which is perfectly aligned with the perimeter security requirements demanded by the Fintech sector.

Summing up, we can say that an HSM is necessary to encrypt sensitive cardholder data and minimize the impact of threats and fraudulent activity, while meeting the data security requirements defined by the PCI Methods of Payment Consortium and other international cybersecurity certifications such as FIPS 140-2 Level 3, established by NIST or the US National Institute of Standards and Technology.

To learn more about what an HSM is, what operations it performs, why we should implement it, what we should demand from it in terms of security…, we invite you to download THIS HSM INFOGRAPHY.

In addition, it should be noted that Fintech will play an increasingly important role in the financial sector and, therefore, there are already many countries in which there are standards and regulations in favour of greater transparency, competitiveness, security and efficiency, as is the case of the Mexican Fintech Law or the Spanish regulatory Sandbox, among others. 

We also invite you to download the HSM Security Trends Study of Fintech in Mexico,

developed jointly by the consulting firm IDC and REALSEC.

In short, we can say that the financial sector is undergoing a Digital Transformation that is changing both the traditional concept we have of money (digital currencies) and the management and use of methods of payment.

This technological disruption will continue to grow and foster new business models in the financial sector, the success of which will be directly affected by cybersecurity and where business continuity and trust will depend on the robustness of the security solutions implemented and due compliance with international security standards.

Diana Guzmán

Country Manager REALSEC Mexico

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