Rapid digitalisation and increased mobility have brought along many benefits, but at the same time have also broadened the threat and vulnerability landscape across the country. According to World Bank and Cambridge Center for Alternative Finance (CCAF), Fintech providers have witnessed a hike of 15 per cent in the cybersecurity threats, thus creating a dire need for the regulators to be equipped with the necessary resources to ensure efficient cybersecurity and data privacy for the end customers.

There has been a recorded spike in cyber-attacks in the recent past. Hackers use various methods to hack and steal records. The financial industry has always been prone to attacks, earlier it was a physical crime and now it’s computer fraud that is taking over the baton. As per the Kaspersky Security Network report, India has witnessed a 37 per cent surge in the cyberattack in the first quarter of 2020 as compared to Q4 of last year. To remain competitive in the new era, fintech companies need to find a way forward that allows innovation without compromising on the security of the consumers. Following are the key reasons why Indian Fintech Industry needs stringent cybersecurity laws:

Encourage People to use Online Services: Cybersecurity threats are a reality for all but shielding the consumers and the company from potentially devastating effects is a must in order to build trust. To protect consumers and to deter cybercriminals, a new set of stringent laws is needed, which not only will encourage the consumers to use more online services but will also help in building their confidence that the data shared with a service provider is safe. As more users adopt digital processes, fintech players can move faster towards increasing reach and financial inclusion.

Securing Individual’s Money and Time: It is common to hear instances where individuals face hacker attacks wherein their personal information is leaked and sold by the hackers for profits. In case information is compromised, customers must often revoke their debit and credit cards, review their receipts multiple times, and always keep their eyes open for problems. Thus, to prevent unnecessary loss of time and money, the government and regulatory authorities must work towards implementing stringent laws to protect data privacy.

Securing the business reputation: When owing to poor cybersecurity law, an institution’s data is violated, it can lose public confidence. It can create major problems, especially for a financial institution, including but not limited to consumer uncertainty. Financial institutions must connect with consumers and generate awareness about cybersecurity. They should help them learn about the steps that can be taken to deter cyber threats and protect critical data.

Conclusion

Fintech startups are more prone to cyber risks in India. Though the industry is capable to lead as well as help the economy to recover from the Covid-19 crisis. However, with cybercrime and cyberattacks becoming a clear hindrance for the fintech industry stringent cybersecurity laws are becoming crucial to evade the cybersecurity challenges and win back the customers' trust once again.

The author is CEO and Co-Founder of LoanTap

DISCLAIMER: Views expressed are the authors' own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.