In the vast IT ecosystem, all branches have an effect on one another. As a result, responding to and countering cyberattacks is a major responsibility of every business, as well as its clients.
Despite the ever-increasing number of assaults globally, a significant proportion of breaches may be avoided if businesses could mitigate cyber dangers and implement security best practices on time.
If you own a Fintech company, you must know Fintech refers to firms that provide financial software development services through the use of modern technologies such as the internet, mobile devices, or software applications.
Any business that leverages such cutting-edge technologies to provide services and products such as personal financial management, insurance, digital payment, and asset management is considered a member of the fintech family and plays a big role in lowering cyber damages.
Due to the stability of our new generation technologies, according to a 2016 forecast by fintech research firm Jupiter Research, by the end of 2021, over two billion individuals will access financial services via mobile devices.
Additionally, the research notes that in some markets, mobile banking apps have already begun to beat online banking. Indeed, banking services account for the lion’s share of the fintech market.
Table of Content:
- Important Fintech Security Challenges
Important Fintech Security Challenges
As mentioned, the Fintech industry is extremely vulnerable to security threats. No surprise. It deals with a plethora of sensitive and vital financial information, such as passwords, bank accounts, and identification data.
To have a better understanding of the most effective and successful security techniques for Fintech projects, it is necessary to first examine the primary security problems and identify the areas to work on. Here are a few of the more significant ones:
1. Establish Strong Digital personas
The market for digital identity verification is expected to reach $12.8 billion by 2024, despite the fact that digital IDs are currently underutilised. However, the security of IDs is a persistent customer worry, as many businesses continue to rely on password-based systems or two-factor authentication methods that are vulnerable to assaults.
Fintech businesses utilise one-time passwords (OTPs) and risk-based authentication to enhance existing biometrics technology. This adaptive authentication method analyses a user’s geolocation, registered devices, biometric data, and one-time password, among other things.
2. Usage of strong passwords
A business that conducts financial transactions must have a robust authentication strategy in place. Username and password are the most basic pieces of information that criminals may steal.
Fintech apps must require users to use complex passwords with a large character set. Fundamental security principles, such as requiring a minimum number of characters, requiring the usage of special characters, and changing passwords at regular intervals, should be strictly adhered to.
3. Compulsory Cloud migration
Fintech firms rely on cloud technologies to improve performance, scalability, availability, and cost-effectiveness. However, as data moves across multiple contexts, it becomes more difficult to monitor.
It is critical, particularly for the Fintech business, to select technologies capable of managing cloud systems with complete integrity. As is often the case, increasing the number of people and technology involved might result in multiplied risks.
4. Usage of two-factor authentication
To strengthen their security, fintech organisations should go beyond the application’s standard username-password authentication. The one-time code, which may be provided through SMS or email, is one of the most extensively used two-factor authentication systems.
Additionally, a push notification system may be built, which enables clients to authenticate their identity with a single touch.
5. Third-party components
Integrating your Fintech product with third-party components like payment gateways, analytics systems, social media buttons, and chatbots might jeopardise its security.
It is advised that their quantity be reduced or that these components be developed entirely from scratch. If you want complicated functionality that is outside your area of expertise, find dependable partners and providers that you can check frequently.
6. Keeping clean logs
User activity logs should be kept in a systematic and orderly fashion. All information, including transaction activity, user identification data, IP addresses, and geolocation, must be recorded. These logs provide critical information that is necessary to conduct a post-mortem analysis in the event of a breach.
Maintaining logs is critical for preparing a thorough report that contains a root cause analysis, a full timeline, and facts about the incident.
7. Compliance with security protocols
Your Fintech business must adhere to the country’s legislation and requirements. Increased awareness of the value of data in the digital economy necessitated the development of new value propositions for the client while also taking their privacy concerns into account.
Without question, fintech is the financial services industry’s future. The days of carrying passbooks and financial instruments to a physical bank to begin transactions are over. Users may now complete the same process from the comfort of their living rooms using their mobile devices.
However, the sector confronts several barriers in securing user data and achieving legal requirements. Customers avoid financial applications due to security concerns.
This is why businesses building fintech applications must ensure they recruit the finest in the market. These businesses should implement real-time security techniques that provide source-code protection, application integrity protection, anti-debugging, detection of network packet sniffing/spoofing tools, and cheat tools in real-time.