Moreover, data is at the heart of every fintech company, which makes them attractive targets for hackers and malicious actors.
Financial technology has created new opportunities for customers and businesses in the finance industry. Individuals can now borrow, transfer, save, and invest from the convenience of their homes. Also, the growth of the industry is massive, with fintech revenues projected to grow sixfold from $245 billion to $1.5 trillion by 2030.
However, following that growth are security risks associated with it. Accounting services firm BPM predicts that cybersecurity attacks aimed at fintech companies will only continue to grow in 2024 and beyond. Furthermore, these attacks can end in monetary losses, reputational damage, and brand erosion.
To prevent such cases, fintech security leaders globally have implemented cybersecurity measures.
1. Stripe
Founded in 2010 by Patrick and John Collison, Stripe specialises in payment processing software and application programming interfaces (APIs).
Based in South San Francisco, California, the company offers top-tier encryption and secure transmission protocols. The protocols, which adhere to the PCI DSS standards, are in place to ensure the security of credit and debit card data.
Launched in 2018, Stripe’s innovative tool Radar detects and blocks fraudulent transactions. After its 2.0 update in 2018, the company claimed it helped reduce fraud rates by an additional 25% for its users.
With other services like Stripe Terminal, Stripe Tax, and Stripe Capital, Stripe has become a trusted name in online payment processing. It powers payments for major companies like Amazon, Google, and Shopify, all of which demand high-security standards.
2. Square
Owned by Block, Inc., Square was launched in 2009 by CEO Jack Dorsey and co-founder Jim McKelvey. Square offers an all-in-one financial services platform, including customer booking, e-commerce, payroll, shifts, loan financing, and banking.
In 2021, Square received FDIC approval from the Utah Department of Financial Institutions. Additionally, with end-to-end encryption, regular vulnerability assessments, and secure data storage, Square reached Level 1 PCI DSS certification. This is the highest level for payment processor certification.
3. PayPal
Launched in 2000 from the merger of Confinity and X.com, PayPal is a leader in secure online transactions.
Acquired by eBay in 2002, PayPal became the leading global payment application after eBay discontinued its Billpoint service. It has arguably outpaced competitors like Citibank C2IT, Yahoo! PayDirect, and BidPay from Western Union.
PayPal uses advanced encryption technologies and multi-factor authentication to protect user data. With its continuous monitoring and fraud prevention mechanisms, the company is compliant with industry standards.
According to the company, its fraud detection tools are informed by data from 1 billion monthly transactions. It claims that the tool gets smarter with each transaction.
4. Ant Financial (Alipay)
Ant Financial’s Alipay, is the second-largest international payment processor after Visa.
Founded in 2014 by Jack Ma as an affiliate of Alibaba, Ant Financial offers a range of products. Available services include electronic payment processing, banking, and mobile payments through brands like Yu’ebao, Huabei, and Xianghubou.
Ant Financial combines advanced cybersecurity measures such as AI-driven fraud detection, biometric authentication, and data encryption. Alipay itself also holds the internationally recognized ISO/IEC 27001 cybersecurity certification.
Used by more than 1.2 billion users, Ant Financial is protected by its AI-powered risk engine AlphaRisk. With the tool, Alipay’s fraud loss rate has been kept under 0.64 in 10 million, way lower than the industry average.
5. Plaid
Established in 2013 by Zack Perret and William Hockey, Plaid is an embedded financial platform. It facilitates secure online payments and transactions by connecting users’ bank accounts to finance applications.
Plaid ensures authorised access to bank data through secure bank portals, which eliminates the need for user credentials. In October 2020, Plaid introduced “Plaid-Link,” a service that enables real-time payments for loans, insurance, and wages. It securely connects 12,000 US financial institutions, plus many more in Canada, the UK, and Europe.
6. Chime
Founded in 2012 by Chris Britt and Ryan King, Chime partners with regional banks to offer fee-free mobile banking services. Chime uses encryption, access protocols, continuous monitoring, and proactive fraud prevention to keep its payment processes secure.
In April 2020, Chime launched the fee-free overdraft product “SpotMe.” It successfully processed $375 million in Economic Stimulus Payments one week from the scheduled government disbursement.
7. Adyen
Adyen, listed on Euronext Amsterdam, is a Dutch FinTech company founded in 2006 by Arnout Schuijff and Pieter van der Does. Primarily catering to businesses, Adyen offers e-commerce, mobile, and POS payment solutions. The company successfully achieved 1.3 billion euros in revenue in 2022.
Adyen’s cybersecurity measures include encryption, tokenization, secure data storage, and regular security assessments, all backed by Level 1 PCI DSS certification.
8. Sift
Founded in 2011, Sift is one of the cybersecurity companies providing AI-powered fraud platform. It uses machine learning combined with data network scoring 1 trillion events per year to offer security solutions.
The company notices that online fraud is a growing problem, especially for retailers and financial institutions. Therefore, Sift’s algorithm distilled over hundreds of millions of user actions to create fraud pattern recognition tool.
Sift has received several accolades, including being named a leader in 2023 Forrester Wave for Digital Fraud Management and G2’s Momentum Leader in Spring 2024.
9. Darktrace
Cybersecurity company Darktrace, established in 2013, uses AI to respond to cyber threats in real time. Since its inception, the tools it created has been deployed over 9,000 times.
With its Enterprise Immune System technology, Darktrace is able to handle Industrial Operational Technology, email, SaaS, cloud, network, and endpoint safety. More than 9,400 organisations, including major financial institutions, rely on its advanced solutions.
The company was included in The Cyber Award’s AI Product of the Year in 2020 and Fast Company’s top 10 most innovative AI companies for 2022.
10. Netskope
Cloud-based cybersecurity company Netskope was founded in 2012 to help organisations apply zero trust principles. The company’s solutions protect data across cloud services and apps, which makes it pivotal for fintech institutions relying on such technologies.
The California-based firm helps financial services companies meet compliance requirements such as FINRA, PCI-DSS, GLBA, and GDPR. Not only that, it provides necessary protection, such as SWG, CASB, ZTNA, DLP, Cloud Firewall and SD-WAN.
In 2024, Netskope is recognized as a leader in the Gartner Magic Quadrant for Cloud Access Security Brokers (CASBs).
What makes these a success
These top cybersecurity firms in fintech have set high standards in cybersecurity. Their efforts have significantly contributed to a safer digital landscape for fintech.
They have also demonstrated collaboration with fellow financial or cybersecurity experts. Collaboration means having access to specialised knowledge that may not be available in-house. This includes latest threat intelligence, security tools, and tailored audits.
Additionally, it is imperative that companies adhere to industry standards and regulations. Compliance is the first step in building trust with users and stakeholders alike.
With 64% of financial services institutions falling victim to ransomware attacks last year, finance organisations should follow best practices from these companies.
- Cybersecurity in FinTech
