Citigroup, Kabbage Form Consortium on Fintech Cybersecurity

Four financial companies including Citigroup Inc. and online lender Kabbage Inc. said they have formed a consortium to address fintech firms’ cybersecurity risks, a sign of the industry’s growing links to traditional banks and insurers. The consortium, which was created in response to recommendations in a World Economic Forum report, also includes Zurich Insurance Group and Depository Trust & Clearing Corp., a U.S. securities clearinghouse. The group’s first objective will be to come up with a set of criteria allowing fintech companies to evaluate the level of their cybersecurity defenses. According to a story in The Wall Street Journal, the effort is a response to the World Economic Forum report, which called for the creation of such criteria as well as a common metric to measure fintech firms’ cybersecurity exposure. This would allow traditional financial institutions to better evaluate the level of risk they are exposing themselves to when partnering with fintech firms. The World Economic Forum’s recommendations, based on input from dozens of bank leaders and other financial executives, lays out more than a dozen additional steps financial companies should take to evaluate and improve fintech firms’ cybersecurity defenses.