FinTech has been an incredible boon to people around the world during the recent pandemic, and has allowed millions of people who previously had no access to banking or lending to leave the 1.7 billion unbanked. Companies are being founded not just in traditional finance and tech hubs like San Francisco, New York and London but in cities like Tel Aviv, Stockholm, Hangzhou and even sub-Saharan Africa.

This comes at a time when there is also a growing problem of cybercrime. 1% of global GDP, or $1 trillion dollars, was lost due to cybercrime in 2020, an increase of 50% when compared to 2018. Despite having a reputation for having the very highest levels of security outside of the military, financial institutions are not exempt – banks and insurers pay on average $18.5 million annually to combat cybercrime, around 40% more than other kinds of business. The reason is obvious: financial companies have direct access to their customers’ money. This is also the case for FinTechs, who also deal with sensitive financial information but who in many cases are much smaller companies than established banks, meaning that they may not have the same ability to deploy bank-grade security systems.

This is a particular problem for companies based outside of traditional tech hubs, and doubly so for start-ups in the developing world. There is already a significant a skills shortage in the cybersecurity industry, and this is much more pronounced outside of the English-speaking, developed world – somebody with cybersecurity experience knows that they can often make more in Silicon Valley than they can in their home country. That leaves the areas that could be producing much-needed innovation for under-banked populations without the security that they need. This particularly the case with encryption technology – this is a complex area that is often vital for keeping customer data safe but can usually only be accessed through expensive hardware security modules that require extensive expertise to use correctly and to be compliant with regulatory regimes around the world.

So how can start-up FinTechs around the world access the same encryption technology as their big brothers in more developed areas?

Cloud-based encryption bridges the gap

The use of cloud-based technology has accelerated during the recent pandemic, especially among FinTechs, 55% of which say that they use multiple cloud platforms. This technology has clear advantages for smaller companies: it scales well in terms of both cost and capacity, can be deployed quickly, tested in sandbox environments and is often much easier to use than extensive data centres or homebrew solutions.

Cloud-based services allow much smaller companies to deploy encryption, PCI standards and tier-one payment security, all handled by experts via a fully managed service. This means that start-ups can focus on their core business knowing that security and compliance is taken care of, which in today’s cybersecurity climate will be a major relief for the company and their customers.

To learn more, visit: www.myhsm.com/webinar-breaking-down-the-barriers-to-cloud-based-payments-solutions/