Financial institutions serve as beacons for cybercriminals. With the potential to swipe all kinds of personal data from your bank accounts, hackers target multiple access points to your financial data. As a result, financial institutions average $100 billion in losses due to cybercrime each year.
But how are financial institutions and service companies acting to protect user data? What kind of tech and automation processes keep hackers from breaking in?
Advances in banking cybersecurity happen all the time. Even as cybercriminals improve their own processes for hacking into a system, new innovations bring added elements of security to your every financial transaction.
On the cutting edge of this security are blockchain, triple-entry accounting, and tokenization systems. Here’s what you should know about them.
Blockchain
Increasingly, financial institutions and services are utilizing blockchain tech to enhance user security. Invented for and popularized by cryptocurrencies like Bitcoin, blockchains are highly encrypted and decentralized networks of data. Each bit of information is stored in a module called a block. To alter one of these blocks requires alteration of the entire chain. This makes hacking a blockchain especially difficult.
When it comes to financial security, blockchain brings some of the benefits of cryptocurrency to all transactions. These include:
- Anonymity of data sending and receiving
- Enhanced security through block encryption
- Reduced or eliminated transaction fees
- Ownership of data through private keys
- Traceable access through time and key stamped data
Because of these benefits, blockchains make for secure systems that can operate across the globe. A decentralized network means you can access your financial data from anywhere, while private keys and encrypted hash functions help ensure that data remains safe even so.
Blockchain systems have already been adopted in one form or another by major financial institutions like Visa and Citi. This smooths the transference of data for a global economy while keeping your financial information secure.
Triple-Entry Accounting
Modern technology is altering the way accounting processes secure finances across businesses. For a long time, double-entry accounting has been the standard in keeping books. Now, through the use of blockchain and smart technology, triple-entry accounting is emerging as a new industry standard.
Through triple-entry accounting, transactions are posted to three separate sources simultaneously. This process requires the use of blockchain tech because only this decentralized data source is capable of hosting data that is almost entirely immutable. No one party can enter the system and adjust or falsify data. Instead, all transactions remain clear, encrypted, and time-stamped.
This tech is keeping financial data safe from all kinds of embezzlement and fraudulent activity. Previously, extensive auditing would have to be performed to find potential errors. Now, triple-entry accounting through blockchain immediately and automatically registers information to protect company and consumer data.
With reduced threats of mishandling business ledgers, consumers are protected both in the security of their own data and in risks with company liability. Lawsuits are costly. A company that retains strict and above-board financial processes comes with less risk. Additionally, companies not prone to losses caused by embezzlement and poor accounting can offer lower costs to consumers with a higher profit margin.
Keep you and your business safe through the use of triple-entry accounting through blockchain systems, when possible. Where not, be sure to use encryption and tokenization.
Tokenization
Millions of Americans use a mobile device to make or process a transaction. According to PEW research, 56% of American adults reported making at least one mobile payment in 2019. This level of activity represents a large target for would-be hackers looking to steal data.
Luckily, however, security processes like tokenization are in place to protect mobile payments. Tokenization is a process that functions similarly to encryption. Through tokenization, data is transferred into a placeholder that means nothing on its own. However, unlike traditional encryption, tokenization is an irreversible process that does not maintain a coded relationship with the original data.
This means that data that goes through the tokenization process is de-identified. Stripped of information that would tie the data to sensitive account info, the token can then be retained with a greater level of security by a company.
Tokenization and encryption methods have become a standard, especially in the wake of the coronavirus pandemic. With more workers than ever before at home and transferring sensitive data to and from workplace servers, these security standards help keep everyone safe.
Security while working remotely means authorized users and a protected network across devices. Tokenization offers a step in this direction.
Final Thoughts
Cybersecurity is a constantly advancing field. With each innovation in protective tech come cybercriminals seeking to take advantage. However, with security like blockchain, triple-entry accounting, and tokenization businesses can make cybersecurity decisions that work for them.
Any approach to digital financial security starts with education. Understanding potential threats, backing up data, and maintaining strict security policies can all help protect your financial data. Then, advancements in blockchain, accounting, and tokenization give you and your financials added security, keeping them safe despite new and improved hacking schemes.
While no financial data on any network can ever exist risk-free, these technologies are here now, helping secure your most valuable information.
Ransomware Protection Checklist
Ransomware attacks are increasing, but they’re not unstoppable. There is no single layer or control that can be implemented which will completely protect you. Using a layered approach to fight against ransomware and going back-to-basics is the best method to use when defending against attack. Download this checklist for a starting point to protect your organization from the preventable threat of ransomware.
Author Bio: Jori Hamilton is an experienced writer residing in the Northwestern U.S. She covers a wide range of topics but takes a particular interest in covering topics related to Cybersecurity and business productivity. As an avid technology enthusiast, she quickly took an interest in Cybersecurity and the rising threats businesses and individuals continue to face. She is also a strong supporter of the DEF CON community and attends the conventions as much as possible to further her Cybersecurity knowledge. To learn more about Jori, you can follow her on Twitter and LinkedIn.
Jori is a guest blogger. All opinions are her own.
