Malaysia is driven by digital domination. The country’s technological evolution encompasses everything from robotics and cloud technology to artificial intelligence (AI), the Internet of Things (IoT), and blockchain technology. Considering these digital advancements, Malaysia has excelled on a hyper-scale.
However, the rapid digitization of schools, banks, hospitals, supply chains, commerce, and government has exposed the Malaysian economy to a highly sophisticated threat. Cybercrime has been spreading at a breakneck pace, impacting millions of individuals and businesses across the world.
Malaysia’s digital revolution has brought a new threat to the shoreline. Cyber professionals have witnessed how cyber-related crime and fraud have skyrocketed in recent years, costing the economy millions, and leaving plenty of individuals vulnerable to digital crime.
This year, over 38 percent of cyber professionals have reported seeing an increase in cyber-related crime, an increase from 31 percent in 2023, according to ISACA’s State of Cybersecurity Report.
Notably, countries across much of South East Asia (SEA) are witnessing an increase in cybercrime and fraud. For one, in the third quarter of this year, Malaysia was the eighth most breached country in the SEA region. In total, nearly half a million accounts were breached, a 144 percent increase from the number leaked in the second quarter.
In 2023, there were more than 74,000 attacks taking place each day, amounting to 26.85 million for the entire year. For cybercriminals and hackers, nothing seems to be off limits, and these threats have become increasingly sophisticated.
Fintech Market Cybersecurity Trends
Services offered by fintech providers, such as digital banking and automated transactions have made it possible for attackers to obtain sensitive personal information, and extort thousands from victims.
Faced with rising cyber threats, Malaysia has started taking steps to introduce new cybersecurity strategies to mitigate the further escalation of digital fraud, and double extortion ransomware attacks.
These attacks are attempting to undermine the very core of fintech companies, creating economic instability, and eroding trust among customers and providers.
AI-Powered Compliance And Governance
Artificial Intelligence has provided fintech companies with an immense amount of leverage to support new digital innovations in banking. Companies are using AI applications in a variety of ways, allowing them to automate various tasks, and process large amounts of data more efficiently.
However, the complexity of AI applications, coupled with the rise of cybersecurity threats has spawned the development of AI-assisted threats. Through the use of AI applications, hackers can generate fake messages, and set up phone accounts to imitate businesses or company representatives.
These issues are becoming more widespread, and very costly. In February 2024, a Hong Kong-based business suffered a $25.6 million loss following a sophisticated deepfake scam that was used to mimic company executives, and hackers orchestrating a convincing conference video.
Closer scrutiny is required to ensure and monitor user and employee activities more effectively to minimize potential risks. AI-driven governance frameworks could act as an approach that can address various complex compliance checks in real time.
These security practices ensure regulatory compliance and provide continuous security audits while delivering more adaptive governance solutions based on emerging threats. AI-powered compliance and governance could become the backbone of fintech systems, and promote more robust and compliant cybersecurity infrastructure.
Zero-Trust Architecture Security
In fintech, zero trust security limits access to digital assets, creating less opportunity for fraudsters to take control of digital resources, including financial accounts, or gain access to customer bank details.
Zero trust technology has been designed to only provide authorized users, in this instance, individual account holders, access to the necessary digital resources. These security systems are designed to act as a primary safety net and assist in minimizing threats that are caused or related to human error.
For instance, one Gartner report found that a robust 75 percent of security failures are attributed to human error. This is an increase from 50 percent two years prior. Inadequate knowledge or skill to manage access privileges and account identities can directly threaten the safety of users and fintech companies.
Core elements of zero trust architecture enable improved endpoint threat detection and establish a Privileged Access Management (PAM) or Identity Access Management (IAM) procedure. These features are often a primary objective of zero trust architecture and are applied as best practices across each system.
Quantum Cryptography
Quantum cryptography is another cybersecurity trend that could gain increased traction among fintech companies in 2025. For the last decade, quantum computing has provided promising developments in computational power, creating systems that are faster, more agile, and more powerful compared to the world’s biggest supercomputer, the D-Wave quantum computer.
Combining our understanding of quantum computing with that of cryptography will provide more security optimization at an advanced level. These computer systems will have the ability to process thousands of digital touchpoints and analyze whether any of these could be potential threats.
But as developers prepare for the next generation of supercomputing, hackers are taking a similar approach to developing encryption keys that could overpower even the strongest systems known to date.
Quantum cryptography is a powerful tool, and these systems can help protect digital assets and enable more complex encryption. However, as fraudsters become smarter, developers will need to look towards a post-quantum era that will allow them to stay several steps ahead of these bad actors.
Continuous Threat Detection
Continuous threat detection allows for real-time threat detection and plays a proactive role in defending digital systems against cyber threats. In fintech, continuous threat detection could provide better oversight in identifying and reacting to cyber threats, which in return could minimize potential breaches and financial losses.
This could assist fintech platforms that have been witnessing an increased surge in cyber threats. In Malaysia, more than half of organizations currently recognize phishing attacks as their predominant concern, according to a survey by IDC. Second to this are ransomware attacks, including unpatched vulnerabilities, identity theft, and attacks directed at the Internet of Things (IoT).
Using continuous threat detection security would employ proactive security measures that enhance rapid monitoring and reaction to possible attacks. Not only this, but these systems play an important role in further developing regulatory compliance for the financial services industry by setting a desired security standard for fintech companies and digital banks.
There is still plenty of work that needs to be put into getting continuous threat detection to work more effectively, however, fintech companies could see more widespread adoption of these technologies due to the elevated support these systems provide users.
Advanced Cloud Cybersecurity
The use of cloud technologies enables companies and individuals to access various digital resources from any central point. This technology further helps to drive cross-collaboration and can store a vast amount of information and data.
Cloud computing plays an important role in fintech, allowing for better transaction processing, promoting faster and more reliable security measures, limiting the need for third-party intermediaries, reducing overhead costs for companies, and lowering account fees for consumers.
However, in the coming year, as we see more fintech companies begin to embrace the adoption of cloud technology across their service and product offerings, cloud cybersecurity will bring another layer of security for users.
Cloud security establishes a more robust authentication and access control process while implementing multi-factor authentication across different touch points. These systems provide better cloud-native encryption, which in turn could help to encrypt sensitive financial data, monitor access logs, and routinely review user activity and suggest improvements based on this activity such as account password management.
Cloud technology will help transform the future of digital banking, however appropriate security systems, and users could be leaving a lot of open doors for cybercriminals, and potentially placing themselves and others at risk of malicious threats.
Looking Towards 2025
The Malaysian fintech market is rapidly expanding. Demand for digital banking services continues to grow, and consumers are looking for more reliable, safe, and efficient banking solutions that can be personalized based on their needs.
More competition does mean an increased number of potential challenges that companies could be exposing to consumers. Having more of our personal lives online, and completing more transactions through the Internet of Things could expose consumers to an array of digital threats and bad actors.
Fintech companies require proper regulatory support to help develop the necessary cybersecurity systems to protect consumers and to develop a more secure financial environment against a backdrop of increased digital extortion.
Featured image credit: image via Freepik
