Financial Ecosystems and Supply Chain Risk
The adoption of financial technology, or fintech, tools is at an all time high, and consumers expect easy digital access to their finances – they want to transfer money, check insurance claim status, and manage their investments online. In a study of fintech’s impact, 93% of consumers reported seeing real benefits from their fintech apps in 2022, an increase from 90% in 2021 and 84% in 2020 (Plaid). Financial institutions are highly motivated to offer homegrown tools as well as connect to third-party solutions in order to attract and retain customers.
Financial ecosystems are growing in complexity to deliver these capabilities, but unfortunately, these extended supply chains leave financial institutions at risk of breach and financial loss. In their 2022 Data Breach Investigations Report, Verizon estimates that supply chain breaches were responsible for 62% of system intrusion incidents (Verizon). Why is this type of abuse so prevalent, and how can financial institutions appropriately manage this massive risk vector?