Cybersecurity Trends Impacting Fintech

#FinTech : #Cybersecurity in Fintech: A Wake-Up Call for India’s #Digital Economy. Aditya Birla Capital Digital app has been breached by #cyberattack Unauthorized access led to the theft of digital gold worth Rs 1.95 crore from 435 accounts. While the company acted swiftly—restoring holdings, freezing fund transfers across multiple bank accounts, and resolving technical vulnerabilities—this incident underscores a critical challenge facing India’s booming fintech sector. This isn’t an isolated case. Let’s rewind: In 2020, Paytm reported a data breach exposing sensitive customer data, raising alarms about payment security. Zomato faced a 2020 breach where 17 million user records were compromised, highlighting vulnerabilities in customer data management. More recently, Laxmi Vilas Bank (before its merger with DBS) encountered a 2021 cyber fraud incident, losing crores due to phishing attacks. These breaches, now joined by the Aditya Birla incident, paint a clear picture: as India’s digital payment market—projected to hit $135 billion by 2025—grows, so do the risks. Cyberattacks erode consumer trust, a cornerstone for any fintech’s success. When users fear losing their hard-earned money or personal data, adoption slows, and innovation stalls. So, what’s the way forward? (1) Robust Security Frameworks: Fintechs must invest in advanced encryption, multi-factor authentication, and regular security audits. The Aditya Birla response shows proactive steps can mitigate damage—let’s make this the norm. (2) Regulatory Oversight: Stronger collaboration with the RBI and CERT-In can enforce compliance and set industry standards. (3) Consumer Education: Empowering users with knowledge about phishing and safe digital practices can create a first line of defense. (4) Incident Transparency: Quick, transparent communication (as seen here) rebuilds trust—keep it up! For India to lead the global fintech revolution, prioritizing cybersecurity isn’t optional—it’s essential. EmpowerEdge Ventures

₹250 crore ($28.9 million) in fines under the DPDP Act That’s how much messing this up will cost fintech founders. When you’re building in fintech, it’s easy to chase the numbers. → How fast can we go live? → How soon can we onboard users? → How big can we scale? And in that rush, some things get left behind. Like cybersecurity. Not because founders don’t care. But because there's too much to focus on. But. One leak. One breach. One regulatory notice. And suddenly the entire platform feels fragile. Too many treat it like an add-on. When it should’ve been baked into the foundation. Especially in India.  Where fintech is booming but tightly watched. So if you're building here: → Take compliance seriously → Take cybersecurity seriously → And make sure your contracts reflect that And if you're looking to do it, here's what I recommend: 1 // Know the Laws and Who Regulates You • IT Act, 2000 + DPDP Act, 2023 = core data/cyber laws • RBI, SEBI, IRDAI, PFRDA = sector-specific mandates • Miss one? You risk penalties, license loss, and legal action 2 // Design for Compliance from Day One • Follow IT Act “reasonable security practices” (ISO 27001, SOC 2, PCI DSS) • Follow RBI mandates: a) Cybersecurity audits (annual/quarterly) b) Breach reporting (within 6 hrs to CERT-In or RBI) c) Data localization for payment aggregators - Comply with DPDP Act: consent, minimization, user rights 3 // Hardwire Cybersecurity into Contracts • Add clauses mandating compliance with IT Act, DPDP, RBI/SEBI • Require: a) Data encryption b) Vulnerability assessments c) Breach notification timelines - Use flow-down clauses for subcontractors and SaaS tools 4 // Prepare for Audit, Not Just “Best Efforts” • Maintain: a) Security assessments b) Penetration/VAPT reports c) Firewall logs d) Cyber insurance • Set up board-level cyber risk reviews • Assign ownership with regular compliance updates 5 // Plan for the Worst, Not Just the Best • Draft and test a cyber incident response plan • Set breach insurance that covers regulatory fines • Audit all cloud/SaaS tools for compliance gaps 6 // Build Trust, Not Just Tech • Show users and investors: a) You collect explicit consent b) You store data in India c) You act on deletion/privacy requests promptly All this matters for 2 main reasons: • Fines: Up to ₹250 crore under DPDP Act • Penalties: ₹10 lakh/day under RBI guidelines And also: • Non-compliance = license suspension • Irreparable brand damage • Legal liability - even for accidental breaches So before your next product launch, investor call, or audit: • Audit your tech, policies, and contracts • Ensure compliance with IT Act, DPDP, RBI, sectoral rules • Fix what’s missing before it becomes a headline Cybersecurity isn’t a legal burden. It’s the only way to protect the value you’re racing to build. --- ✍ Tell me below: What’s one thing your team has done recently to tighten up data security or compliance?

Cybercriminals in the payments world are evolving, leveraging #AI to execute deepfake scams, synthetic identity #fraud, and adaptive attacks that evade traditional security measures. The question is: Are we ready to counter them with AI-driven defenses?   In my latest perspective for Cybersecurity Insiders, I explore how financial institutions and payments ecosystem can stay ahead by shifting from reactive security to AI-powered #strategies that anticipate and prevent fraud. From #predictive fraud detection and #adaptive threat protection to AI-driven #compliance and advanced biometric #authentication, the future of secure digital payments depends on our ability to #innovate, #collaborate, and stay one step ahead of cyber threats. The real challenge isn’t just the sophistication of attacks, it’s how well we prepare to counter them.   Read the complete article here: https://lnkd.in/gBkSVK45   #CyberSecurity #AI #DigitalPayments #FraudPrevention #FinTech Persistent Systems