Overcoming Security and Privacy Concerns With Finance Technology in Small Businesses

By Greg Grzesiak Greg Grzesiak has been verified by Muck Rack's editorial team
Published on April 5, 2024

In the ever-evolving landscape of finance technology, security, and privacy are paramount for small businesses. We’ve gathered insights from founders and CEOs, among other experts, to share their best practices. From monitoring FinTech compliance standards to using a secure password manager, discover twelve key measures these professionals have implemented to safeguard their operations.

  • Monitor FinTech Compliance Standards
  • Vet Blockchain Infrastructure
  • Adopt a Layered Security Model
  • Diversify Financial Institutions
  • Implement Multi-Factor Authentication
  • Conduct Phishing Simulations
  • Enforce Robust Privacy Policies
  • Outsource Cybersecurity Measures
  • Verify Cloud-Based Accounting Security
  • Encrypt Financial Data
  • Restrict Access Based on Roles
  • Use a Secure Password Manager

Monitor FinTech Compliance Standards

If you are utilizing financial technology in your small business, you should become a keen observer of how they manage your data. One specific step to closely monitor is the technology’s compliance standards. We view SOC 2 compliance as the gold standard in the realm of security, confidentiality, and privacy matters.

SOC 2 is a voluntary compliance standard that is tested by third parties to ensure that the company is appropriately applying specific measures to safeguard sensitive data. For any new vendors you are exploring, ask them if they are SOC 2 certified. If yes, you can move forward with a much higher degree of confidence that innately mitigates the risks that come with sharing financial data.

Roman VillardRoman Villard
Founder, Full Send Finance

Vet Blockchain Infrastructure

In addressing security and privacy concerns within finance technology for small businesses, one effective practice we’ve solidified at MAH Advising PLLC involves the thorough vetting of all digital asset investments. Given the rise in blockchain technology and the profound impact it has on financial transactions, the necessity for rigorous due diligence cannot be overstated.

One specific step we’ve taken is the comprehensive analysis and evaluation of blockchain infrastructure where these digital assets operate. This approach not only safeguards the investment but significantly enhances the security and privacy framework surrounding these financial technologies.

For example, we’ve assisted clients in the deployment of custom-built blockchain solutions, focusing keenly on the security features inherent to these systems. By leveraging blockchain’s distributed ledger technology, we ensure enhanced security and privacy for financial transactions. This technology’s inherent encryption and decentralization mitigate risks of unauthorized access and data breaches, offering a robust solution to digital finance’s privacy concerns.

Moreover, a key element of our strategy involves educating our clients on the importance of security and privacy in financial technology applications. We provide guidance on establishing internal controls and developing risk assessment methodologies tailored specifically for digital finance operations. This hands-on approach helps small businesses not only navigate but thrive in the complex regulatory landscapes, ensuring they remain compliant with laws like GDPR and CCPA while leveraging the benefits of financial technology.

Through this multidimensional strategy, combining due diligence, leveraging advanced technology, and prioritizing education and compliance, we’ve been able to create a secure and privacy-focused financial technology ecosystem for our clients. This not only protects their business but also builds trust with their customers, proving crucial for long-term success in the digital finance sector.

Michael HurckesMichael Hurckes
Managing Partner, MAH Advising PLLC

Adopt a Layered Security Model

In my work as an IT Consultant and President of TechTrone IT Services, dealing with security and privacy concerns in financial technology has been a cornerstone of our strategy to support small- and medium-sized businesses. One best practice that has stood out in our approach is the adoption of a layered security model for our clients’ financial transactions and data storage. This involves employing a combination of secure encryption, robust firewalls, and continuous monitoring systems to protect against unauthorized access and data breaches effectively.

For instance, we’ve implemented advanced encryption for all sensitive financial information during transmission and at rest, ensuring that client data remains inaccessible to unauthorized parties. Alongside this, setting up comprehensive firewalls has been crucial in creating a first line of defense against potential cyber threats. Moreover, we’ve established a protocol for continuous monitoring and real-time alerts, allowing us to detect and respond to suspicious activities immediately, preventing potential data breaches.

Furthermore, we stress the importance of educating our clients on the significance of strong, unique passwords and the use of multi-factor authentication (MFA) for an additional layer of security. By cultivating a corporate culture that prioritizes cybersecurity awareness and adheres to best practices, we’ve witnessed a tangible decrease in the vulnerability of our clients’ financial technologies to cyber threats. In sharing these experiences, my goal is to underscore the effectiveness of a multi-faceted, proactive approach to cybersecurity in safeguarding the financial aspects of small- and medium-sized businesses.

Remon ElsayeaRemon Elsayea
It Consultant, Techtrone

Diversify Financial Institutions

It is paramount to have confidence in the individual overseeing your finances. Maintaining a clear understanding of your financial affairs at all times is essential, enabling you to promptly detect any anomalies or discrepancies.

Diversifying the institutions where you hold your funds is a prudent strategy. By spreading your assets across multiple banks, you mitigate the risk associated with potential breaches, ensuring that your financial resources are not concentrated in a single location.

Suzy WrainesSuzy Wraines
Business Foundation Coach, Business Simplified LLC

Implement Multi-Factor Authentication

I have realized that it is essential to deal with security and privacy risks associated with using financial technology in our small business. This has been a top priority for me as the Founder/CMO at Kualitee.

One of the ways we have done this is by introducing multi-factor authentication (MFA) for all financial transactions and accounts within the organization. By adding another layer of verification beyond passwords, which can be stolen or hacked, this step significantly boosts our financial data and transaction security.

Traditionally, password-based security, together with other biometric factors like physical tokens, mobile device confirmation, or fingerprints, MFA requires users to present two or more validation features during login into a system. With such an approach, there will be a reduced chance of illegal entry even if a password is disclosed, as it would be highly improbable for an attacker to have knowledge about the supplementary means required for access.

Implementing MFA was one way we decided to protect ourselves against the sophisticated approaches cybercriminals use while targeting financial information. It is through regular training on cybersecurity hygiene, including awareness about emerging threats from financial frauds, combined with this practice, that we safeguard our FinTech stack.

Other small businesses aspiring to improve their FinTech security can start by adopting MFA, which is very effective and easy to implement. In so doing, you will demonstrate your commitment to protecting your customers’ sensitive information as well as your own business’s confidentiality, thus promoting trustworthiness and dependability in your services.

Khurram MirKhurram Mir
Founder and Chief Marketing Officer, Kualitee

Conduct Phishing Simulations

Combating phishing attacks requires a two-pronged approach: reinforcing reporting protocols and conducting regular simulations. Phishing simulations, where employees receive disguised emails, test their ability to spot red flags and avoid malicious links. This hands-on experience complements established reporting protocols.

Additionally, equipping employees with a phish-alert program or email plugin empowers them to report suspicious emails instantly. This comprehensive strategy fosters targeted learning, keeping your team vigilant against ever-changing cyber threats.

Jamie FrewJamie Frew
CEO, Carepatron

Enforce Robust Privacy Policies

In my experience running a small business and offering legal advice on technology law, addressing security and privacy concerns, especially in financial technology, is critical to maintaining trust and safeguarding both your clients’ data and your business’s reputation. One best practice we’ve implemented in our operations is the creation and enforcement of robust privacy policies. This was a direct response to understanding the growing concern for privacy as our lives and businesses become increasingly digitized.

Another specific step we took was ensuring compliance with global data privacy requirements, such as the GDPR in Europe and the CCPA in the US. This involved conducting a thorough audit of how we collect, store, and use personal data, followed by making the necessary adjustments to our processes and systems. For instance, we made sure all client data stored on our platforms was encrypted and that we had clear protocols in place for data breaches.

Additionally, we integrated privacy-by-design principles into the development of new financial technologies, ensuring that privacy safeguards are built into technology products from the outset, rather than as an afterthought. For businesses looking to enhance their security and privacy protocols in financial technology, starting with a comprehensive review of current practices against global standards and implementing privacy-by-design principles can be a solid strategy. These steps not only helped us mitigate risks but also built a stronger trust bond with our clients, proving that we’re committed to protecting their privacy and data.

Adrienne FischerAdrienne Fischer
Founder, Basecamp Legal

Outsource Cybersecurity Measures

We have outsourced our cybersecurity. As an e-commerce-based business that processes online payments, and therefore handles sensitive data, we felt it’s important to ensure we protect ourselves from any cyberattacks.

By using a specialized company, we can implement the best safety measures, such as firewalls, antivirus software, and other tools, that are bespoke for our needs and business size. I strongly believe any company dealing with data should make this investment.

Will BakerWill Baker
Director, Skirtings R Us

Verify Cloud-Based Accounting Security

As technology increasingly underpins even small companies, digital protections become ever more crucial. When implementing cloud-based accounting tools, I focused on verifying their robust security protocols, such as encrypted data transfers, access controls, and penetration testing. Transparency into those measures helped select providers, ensuring compliance with our standards.

Further steps involved scrutinizing third-party permissions and only enabling features that explicitly further legitimate operations. Multi-factor authentication and regular password updating across all administrations now minimize vulnerabilities from compromised credentials, too.

Employee training built awareness that even inadvertent mistakes threaten livelihoods. Now, suspicious emails eliciting sensitive details receive caution, alongside installed anti-malware across our network of devices.

Ultimately, diligence means recognizing that cyber defenses require constant vigilance, matched to evolving threats. While no system prevents all risk, prioritizing prevention through prudent due diligence, technology safeguards, and ongoing education cultivates resilience, supporting both clients and coworkers even amid inevitable unknowns ahead.

Loretta KildayLoretta Kilday
Debtcc Spokesperson, Debt Consolidation Care

Encrypt Financial Data

In our small business, we’ve implemented several measures to address security and privacy concerns when utilizing finance technology.

One best practice we’ve adopted is ensuring the encryption of sensitive financial data both in transit and at rest. This involves using secure communication protocols for transmitting data over networks and implementing robust encryption algorithms to protect stored data.

Additionally, we’ve implemented multi-factor authentication for accessing financial systems and regularly update and patch software to mitigate vulnerabilities. Educating employees about the importance of cybersecurity hygiene and enforcing strong password policies are also integral parts of our security strategy.

By prioritizing these measures, we aim to safeguard our financial data and mitigate the risk of unauthorized access or data breaches, enhancing trust and confidence in our finance technology systems.

Kartik AhujaKartik Ahuja
CEO & Founder, GrowthScribe

Restrict Access Based on Roles

Overseeing a fully remote company since 2014 has not only required innovation in how we manage productivity but also in how we handle the security and privacy concerns associated with using finance technology. Safeguarding our financial operations and data is paramount. Here’s how we address these critical issues and a specific step we’ve implemented.

Regular security audits and compliance checks have been fundamental to our approach. By systematically reviewing our financial technologies and processes, we ensure they meet strict security standards and regulations. These audits help us identify potential vulnerabilities and address them proactively, rather than reactively. It’s a bit like regular health check-ups for our financial systems, ensuring they remain robust and secure against evolving threats.

We also emphasize the importance of staff training in cybersecurity best practices. Given that human error can often be a weak link in security, equipping our team with the knowledge to recognize and avoid potential threats is vital. This ongoing education covers everything from phishing scams to secure password practices, fostering a culture of security awareness that permeates every aspect of our operations, including financial management.

Our best practice is to secure our financial data; we’ve implemented a company-wide policy restricting access to financial information based on roles and responsibilities. This principle of least privilege ensures that only employees who need access to perform their specific job duties can view or manipulate financial data. Regular reviews of access levels help us maintain tight control, minimizing the risk of internal breaches. It’s a proactive approach that not only protects sensitive information but also reinforces a culture of accountability and trust within our team.

Alari AhoAlari Aho
CEO and Founder, Toggl Inc

Use a Secure Password Manager

One measure we’ve taken to address security and privacy concerns when using finance technology at our firm is implementing a password manager.

We’ve chosen a reputable password manager tool that securely stores and manages all of our passwords in an encrypted vault. This means we no longer have to rely on easily forgettable passwords or risky practices like writing them down on paper.

With our password manager, we can generate strong, unique passwords for each of our accounts and access them with a single master password or biometric authentication. This ensures that our accounts remain protected from unauthorized access and potential security breaches.

Additionally, the password manager allows us to securely share passwords with team members on a need-to-know basis, further enhancing collaboration while maintaining security.

By using a password manager, we’ve strengthened the security of our financial accounts and data, giving us peace of mind knowing that sensitive information is well-protected. It’s a simple yet effective tool that plays a crucial role in safeguarding our business against cyber threats.

Hunter GarnettHunter Garnett
Personal Injury Lawyer, Managing Partner, Decatur Personal Injury Lawyers

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By Greg Grzesiak Greg Grzesiak has been verified by Muck Rack's editorial team

Greg Grzesiak is an Entrepreneur-In-Residence and Columnist at Grit Daily. As CEO of Grzesiak Growth LLC, Greg dedicates his time to helping CEOs influencers and entrepreneurs make the appearances that will grow their following in their reach globally. Over the years he has built strong partnerships with high profile educators and influencers in Youtube and traditional finance space. Greg is a University of Florida graduate with years of experience in marketing and journalism.

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