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The Intersection of IoT and Financial Security: Expert Tips for Protection
Catherine Schwartz
December 25, 2023 - Guest Writer
Sophisticated Internet of Things (IoT) technologies transformed the cybersecurity systems in financial services. They’re continuously evolving and improving. Take credit cards as an example—commercial banks significantly cut the risk of skimming by replacing magstripe cards with chip-and-PIN cards.
But despite these advancements, fraudsters remain at large. They still find ways to exploit IoT-enabled finance systems by manipulating victims with social engineering strategies. Humans are the weakest link in cybersecurity, after all.
To protect yourself against these crooks, learn to utilize IoT technologies in financial cybersecurity. Most victims barely understand how they work. You’ll already prevent most cyberattacks if you can spot phishing attempts, filter spam messages, and secure your online transactions.
The Role of IoT in Securing Financial Data
At a basic level, IoT in Finance refers to the devices involved in the payment or funds management process – payments, transfers, monitoring and security. Some real-life applications of IoT in the finance industry include:
- POS systems processing card payments
- Payment gateways verifying online transactions
- Mobile wallets sending and receiving funds
- Security systems monitoring suspicious transactions
- Payment apps sending OTPs
But this list only covers the basics. IoT technologies have significantly advanced over the years, and they support financial cybersecurity through:
Biometric Authentication
IoT boosts biometric authentication through fingerprint and facial recognition technologies. They’re versatile systems with various applications, from unlocking smartphones to authorizing online banking transfers. Modern AI models can detect facial features with minimal to no biases.
Considering their overall reliability, expect to see these IoT technologies in the finance industry more often. Commercial banks are already integrating them into the system. Fast, accurate facial recognition helps streamline underwriting, debt collection, skip tracing, and credit evaluation, among other processes.
Fraud Detection
IoT lets cybersecurity systems monitor financial transactions in real time and spot signs of fraud fast. Remember: most cyberattacks only take minutes to execute. Financial institutions must flag unusual purchasing patterns and notify involved consumers quickly.
Linda Shaffer, the Chief People Operations Officer at Checkr, believes all commercial banks should update their fraud detection systems with advanced IoT. She says, “Banks should hasten their fraud detection systems. It’s not that they’re slow, but fraudsters are continuously getting faster by exploiting technological advancements. Late reports yield negligible benefits because the crook has likely already fled.”
Credit Card Monitoring
Sophisticated IoT models help consumers and financial institutions alike resolve fraudulent credit card transactions faster. They provide real-time warnings. Banks will send notifications to the involved cardholders’ linked devices; that way, they can choose to lock their credit accounts immediately.
Payment Gateway Security
Payment processors can create more secure, reliable payment gateways with IoT. Considering the confidential data that passes through these pages, cybersecurity is non-negotiable. Just one bad link can cause a massive data breach. What’s more is that the payment processors and eCommerce shops involved will be held responsible, regardless of whether they leaked the data on purpose or not.
Jim Pendergast, the Senior Vice President at altLINE Sobanco, warns business owners to take payment gateway security seriously. He says, “Don’t underestimate data breaches. Losing the financial data of your customers will set you back by hundreds of thousands of dollars, plus you’ll lose their trust. It’s best to invest in cybersecurity right from the get-go.”
Using IoT Systems to Protect Financial Data From Crooks
Don’t overlook modern IoT technologies. These systems might seem intimidating at first, but in reality, even non-tech-savvy consumers can utilize them. Integrate them into your everyday transactions by:
Creating An Extra Layer Of Security With Biometric Authentication
Turn on the biometric authentication features of your smartphone. Ideally, all the apps containing your personal information, credit card details, bank accounts, and digital wallets should require face or fingerprint verification. Otherwise, thieves and hackers could easily steal your data once they have your phone.
We also suggest turning on two-factor authentication (2FA). It will send a unique code to your linked phone number or device before granting restricted accounts. Even if crooks know your password, they’ll still need your OTP to log in.
Using Credit Card Monitoring Apps For Real-Time Data
Monitor your credit card transactions closely. Although card-issuing banks notify cardholders about unusual activity, lowkey, generic purchases might fall through the cracks. You should also stay on top of your card purchases. Waiting until your billing cycles end to contest fraud rarely yields favorable results.
Shawn Plummer, the CEO of The Annuity Expert, encourages consumers to freeze their credit as needed if they notice suspicious activities. He says, “Freeze, not just lock, your credit if you spot fraudulent transactions. A credit freeze prohibits financial institutions from opening new accounts under your name and processing credit card transactions, thus mitigating the potential damages of financial fraud.”
Creating and Use Secure Payment Gateways
Carefully assess payment gateways before using them. Generally, you should stick to widely known and trusted online shopping platforms that guarantee your personal data’s confidentiality. Most compromised payment processing pages come from shady no-name shops. But if you’re set on buying from a relatively small brand, at least inspect the processing page before divulging personal information.
Turning On Real-time Notifications For Online Wallets
Turn on real-time notifications on your online wallets. They should send pop-up alerts when receiving, requesting, or transferring money so that you can monitor all transactions. Set real-time warnings to ensure your speedy response.
Cath Brands, Chief Marketing Officer at Flintfox, warns consumers to act quickly if they see red flags. She says, “Quickly change your login credentials, collect adequate evidence, and then file a report to the involved platforms once you notice unusual activities. Have their customer service team prohibit transactions temporarily.”
How IoT Will Continue Supporting the Finance Industry
No matter how far IoT technologies advance and evolve, they’re merely tools. Crooks can still bypass them by manipulating and tricking victims. Even the most sophisticated platforms could fail if you click on phishing links, download shady files, and divulge personal information online.
For added security, ensure your IoT cybersecurity tools match your tech ecosystem. Let’s say you use Linux. Your device might malfunction if you use incompatible programs made for other operating systems—you need Linux-specific patch management tools.
Admittedly, Linux patch management is relatively complex and time-consuming. To further minimize the risk of security breaches, consider working with the experts at TuxCare. They offer automated, zero-downtime Linux patching systems.
