Cyber Security in Fintech: How to Develop a Secure Fintech App ?
Online financial services have become more widely used as a result of the COVID-19 pandemic, as safety concerns have led to a major shift towards digital solutions. Demand for fintech app security solutions, in particular increased as more people shifted their banking to online platforms. This change emphasizes how important strong fintech cybersecurity is to stable banking operations.
The global online banking market is expected to grow significantly, with a projected valuation of $133.84 billion by 2022. It is anticipated to exhibit a CAGR of 19.50% and reach a valuation of $556.58 billion by 2030.
It is anticipated that the US will continue to see an increase in the use of digital banking. There will be nearly 217 million users by March 2025, up from roughly 197 million in March 2021.
However, a major concern that has arisen with this rapid growth is the security of fintech apps. Since sensitive financial data and transactions are now conducted online, protecting user data and financial assets has elevated to the top of the priority list for Fintech cybersecurity companies.
In this blog post, we’ll discuss the issues that fintech cybersecurity faces and possible fixes. We’ll also examine the crucial procedures needed to develop a safe fintech application.
Fintech cybersecurity is at risk due to the numerous advantages that fintech technology offers. Fintech requires security because breaches in security make it possible for malicious parties to obtain private data.
For instance, a data breach at the fintech startup Revolt in 2022 resulted in the exposure of over 50,000 users’ names, addresses, and partial credit card information. This illustrates how important robust fintech app security is to financial software development.
The following justifies the importance of fintech cybersecurity:
Safeguarding Personal Data
Fintech companies handle sensitive data, such as transaction histories, bank account details, and personal data. Safeguarding this data is essential to preventing cybercrime.
Activating Safe Data Exchange
Stakeholder data sharing is safe and easy with fintech cybersecurity. To ensure data security and privacy when sharing, consent procedures and strong data encryption techniques are essential.
Controlling Electronic Personas Safely
Digital identities are essential to fintech companies in order to deliver a cohesive customer experience. Strong cybersecurity keeps hackers from taking advantage of weaknesses in digital identities.
These ideas give a clear understanding of the importance of cybersecurity in the fintech sector.
As per Statista, 43.5% of US consumers prefer mobile banking, making it the most popular option for account access at the moment. This illustrates how important it is to deal with fintech cybersecurity concerns in order to ensure a straightforward and secure user experience.
The following are the top five cybersecurity obstacles:
1. Theft of Identity
Since identity theft allows hackers to pretend to be real people using stolen personal information, it is a serious concern for fintech cybersecurity. Biometrics and one-time passwords are two instances of authentication techniques that are not totally reliable. Because they can be copied, they are open to financial fraud, identity theft, and unauthorized account access.
2. Attacks by Malware
Security can be compromised by malware that infects fintech systems, such as viruses and ransomware. Malware can enter the system through a variety of entry points, including email attachments, pop-up windows, and third-party software.
The company and its users are at serious risk from them as they have the ability to steal data, interfere with services, or demand ransom payments.
3. Risks Associated with Money Laundering
Money laundering may unintentionally be made easier by fintech services. Additionally, because cryptocurrencies are decentralized, there is a risk that they will be used for illegal purposes due to their widespread adoption. It can be very difficult to track the sources of funds used in cryptocurrency transactions.
Financial institutions that deal with cryptocurrencies must use caution and put strong cybersecurity measures in place to mitigate these risks.
4. Risks to Third Parties
Fintech frequently uses outside service providers for a range of purposes. If the third party’s cybersecurity is weak, these dependencies may introduce vulnerabilities that could affect the security of the fintech company.
Fintech cybersecurity firms must thoroughly verify the security of their third-party suppliers. This guarantees that user data is highly secure.
5. Observance
The fintech sector is bound by an intricate network of regulations, such as PCI DSS and GDPR. In order to safeguard user information, stop financial crimes, and maintain transparency in the financial industry, compliance is crucial.
Noncompliance may result in legal ramifications and harm fintech companies’ reputations. To prevent unintended consequences, fintech companies must adhere to all applicable compliance standards.
How to Create a Secure Fintech Application in 10 Easy Steps
As is well known, data breaches and other cyber security risks are costing Fintech companies money. For your fintech app to be successful and secure, you must adhere to an agile development process. The actions consist of:
1. Protection through Product Conceptualization
As with developing a mobile app, make sure security is taken into account from the outset of product consideration. As you conduct in-depth ideation, competitive analysis, and market research, be sure to investigate any potential threats that may arise from app deployment.
2. Identify the functionality and features.
Make sure you identify the primary features and functionalities of your fintech application before proceeding to the next step. Mapping the development cycle involves fundamental features like push notifications, account management, user sign-up/login, and smooth transactions.
3. Data encryption and two-factor authentication
By requiring users to provide two forms of identification before accessing their accounts, 2FA adds an extra layer of security. Making this a requirement for gaining access to vital information would guarantee strong user authentication.
Furthermore, a fintech app’s use of data or end-to-end encryption protects it against network intrusions and guarantees that, even in the event that data is intercepted, it will remain unreadable and secure.
In the FinTech industry, security protocols like 2FA and encryption are essential for safeguarding user accounts, transactions, and private financial information.
4. Create, Verify, and Implement
Putting everything together for the fintech app development process is the next step. To create a secure fintech application, make use of the appropriate tech stack and the fintech app developers’ experience.
It’s time to test the application for bugs and vulnerabilities after it has been developed. This guarantees that the application is prepared for release on the selected platform, such as iOS or Android.
5. Upkeep and modifications
It’s crucial to take care of maintenance and update issues after the app launches, taking into account user feedback and app performance. In order to enhance the app’s functionality in accordance with market trends, it is critical to maintain security standards and prioritize usability.
6. Develop Security Operations
Continuous security is ensured by DevSecOps, an essential methodology that integrates cybersecurity into the Software Development Life Cycle (SDLC). DevSecOps simplifies vulnerability identification and mitigation throughout the FinTech cybersecurity development process by emphasizing automation and teamwork.
It’s essential for building a safe digital environment where security is a fundamental component rather than an afterthought
7. Logic for Secure Applications
Strengthening the application security and instituting encrypted password policies are examples of fintech cybersecurity tactics. Fintech cybersecurity risks are decreased by features like adaptive authentication, one-time password systems, and short login sessions that add layers of security.
Fintech cybersecurity companies guarantee the highest level of user identity verification and app data protection by implementing these practices.
8. Access Control Based on Roles
Network security can be strategically approached with role-based access control by Access Control Based on Roles
By controlling access according to user roles, role-based access control provides a strategic approach to network security. By ensuring that users have the appropriate level of access, this technique enables businesses to mitigate security threats from both the inside and the outside. Furthermore, it streamlines user administration, facilitating the granting and revocation of privileges as required.
9. Safekeeping of Data
One of the most important steps in developing FinTech app security solutions is making sure data is stored securely. The idea is to protect sensitive data from potential hacker theft and maintain a simple application architecture.
Fintech apps reduce data exposure and breach risks by using strong encryption and minimal data storage.
10. Safe Application Programming Interfaces
The foundation of building a secure environment for clients and companies is safeguarding fintech APIs. Banking APIs are essential channels that facilitate data sharing and smooth communication between software systems.
An Open Banking API, for example, can be used by a personal finance app to establish a connection with a user’s bank and obtain account details.
When combined, the techniques create a comprehensive strategy for fintech cybersecurity solutions. Let’s now investigate the price of fintech applications that support cybersecurity.