Financial institutions

Are your finances safe? Let’s do a security check of financial institutions and DeFi platforms like Nimbus

You change your passwords every month, check your credit score regularly, and make sure you only visit reputable business and financial sites. What could go wrong with your financials and assets? All.
Financial institutions spend an average of 10% of their IT budget on cybersecurity, or about $2,300 per employee per year. If you do the math, that’s millions of dollars for a company to fend off various threats from all sides.
In one corner are cybercriminals who know that financial websites are most vulnerable to hacking. Web page content can be changed and apps can be cloned, so what you see is not, in fact, what you get. Malicious code on websites or apps can access users’ stoves and steal their personal information, to be used as and where criminals choose. Financial institutions use safeguards such as two-factor authentication and data encryption, but hackers are resourceful and always seem to be developing new ways to steal customers’ identities and financial assets.
Then there are ransomware attacks that threaten entire financial systems. Not only could your personal and business accounts be locked out, but denial of service attacks can cripple system-wide operations for days. Up to a third of companies pay the ransom, and any attack results in significant costs to the institution whether it pays or not. The loss of revenue affects both clients and institutions, with damage to reputation, resignations and layoffs of staff, closures.
Finding the talent to fight these threats isn’t easy, but outsourcing to a third-party vendor only increases the risk of vulnerability. Add to this chaos the risk of internal fraud and human error. 75% of attacks are committed intentionally by employees, with a quarter attributed to human error such as opening a suspicious email.
All this is enough to require you to store your belongings in a mattress, but does it make them safe? Who can you really trust? Maybe a system that doesn’t need it.
Cryptocurrency and decentralized finance are said to be trustless because the blockchain technology they use does not require the trust of a third party, such as another human or another institution. There are no intermediaries between you and your financial assets or transactions, and no single entity has authority over the financial system you use. All transactional data is stored on peer-to-peer networks, and operations are performed by immutable or unmodifiable code. This means that while institutions and their employees can be corrupted, this computer code cannot.
Assets are held in crypto wallets containing private keys. Passwords, even if they are random and contain letters and symbols, can potentially be discovered by “brute force” attacks, especially if they are stored or used repeatedly. Private keys, on the other hand, have 51 virtually impossible-to-hack alphanumeric characters, along with many other complex security measures.
Transactions are executed by “smart contracts” that rely on decentralized code and verification, meaning they have no centralized point of failure and are virtually unstoppable. Moreover, the blockchain is immutable and irreversible, thus eliminating the possibility of inadvertent or malicious modifications.
You will notice that using crypto and DeFi (decentralized finance) requires you to trust something: computer code. If there are bugs in this code, it will be vulnerable to hacking and bad actors. That’s why Nimbus, a DeFi industry leader, has a 3-tier audit system that includes audits by top independent companies, internal audits, and an ongoing bug bounty program with rewards for hackers.
Needless to say, there are always bad actors in any industry, and DeFi has seen a few as it evolves and establishes itself. For example, cryptographic “rug pulls” occur when unscrupulous developers abandon their projects and walk away with all user assets. The best way to mitigate this threat is to research the backgrounds of your platform leaders. You want someone like Nimbus CEO Alex Lemberg. With over 30 years of experience as a business analyst for Merrill Lynch, Morgan Stanley, Barclays Capital, CIBC, Bank of America Securities and Credit Suisse, he’s here to stay. His vast understanding of enterprise technologies and his knowledgeable and innovative team create a streamlined and user-friendly environment on the platform.
Ultimately, the choice between traditional financial institutions and DeFi comes down to one thing: having confidence in yourself. If you want to control and protect your own assets, take some time to learn what DeFi offers, and find a platform like Nimbus that provides a DeFi hub and easy access, then this choice is clear.