Fintech apps are evolving fast, with the industry generating billions in revenue and investing a big chunk of that in innovation.
However, there’s one big issue that everyone in the fintech industry whether it is a mobile banking app or an eWallet app like PayPal or Venmo. It is Fintech App Security.
You see, fintech systems are complex, vast, and delicate, as even one thing not working can bring down the whole system. And their mere size makes them quite difficult to proof-check. That’s what makes them vulnerable to cyber-attacks.
Each year, fintech and the financial industry as a whole loses billions of dollar to these attacks. As time progresses, the problem is only increasing.
So, this begs the question, how can we improve fintech app security?
This is the question that we shall be answering in this blog. Therefore, with this being said, let’s get right into it, starting with:
Why is Fintech Security a Problem?
Let’s begin by answering an important question, why is fintech app security so important?
Well, there are a range of reasons. To ballpark it, fintech applications and solutions deal with a lot of crucial data.
This includes financial data, account credentials, user’s sensitive information, and much more. If any of this is compromised, it can lead to great financial and ethical losses. For instance, no user would want their bank details floating around on the internet.
Now, why are big names of the fintech world investing so much money in fintech app security solutions? The answer is simple, as we move ahead; cybercrimes are increasing, hampering the platforms, and claiming billions of dollars.
In fact, it is due to this situation that, cyber security in fintech has become a trend.
Speaking of which, let’s move to the next section where we shall be discussing the top fintech security risks.
Key Fintech Security Risks
Here, we shall be going through some key security risks that have become a headache for both fintech service providers and fintech app development company.
These are, as mentioned below:
1. Unified app ownership
Unified app ownership refers to those fintech apps that offer all-in-one solutions working with a range of different service providers to bring it all together in one place for the user.
The issue here is that even if one of these 1000 points is compromised, fintech app security goes down the drain.
2. Risky data storage
Fintech apps generate a lot of data of all kinds and the issues arise in storing the same.
The platform can either store it natively on the device, which will hamper quick payments and communication with other services, or on the cloud which is a little vulnerable/
Blockchain technology is being used to target this issue.
3. Communication breakdown
Lastly, we have the communication breakdown issue in the fintech application. A gap in communication can lead to errors, security weaknesses, and failure of secure transactions.
In the world of fintech, there is a lot of communication between two parties whether it is APIs and systems or two different fintech apps. Securing the data communication here is super important for a range of reasons, the major one being security issues.
So, these are the main fintech app security issues. And now, it’s time to look at their solutions.
Major Fintech App Security Solutions
Where there is a problem there is a solution. And major fintech security app solution lies right in fintech software development.
Therefore, let’s see what the things companies can do differently are and what are things to keep in building a fintech app of your own.
These are, as mentioned below:
1. Security code and architecture
If you want to keep a fintech app secure, a robust code structure and architecture.
The majority of the security risks happen due to vulnerabilities in code and some openings. If the architecture is strong, it can defuse many attacks by itself, discoursing such events.
2. Use code obfuscation to prevent cloning
For those who are new to the concept, code obfuscation refers to a technique where code is made complex on purpose.
This is done to prevent code cloning as well as unauthorized software reproduction. Consequently, it makes the platform that much more secure.
3. Using AI and MI to track user transactions
AI and ML technologies are being used everywhere, so it doesn’t come as a surprise when you see their application in fintech security.
These models learn and improve as they go. So, it makes a lot of sense to use them to track user transactions. This is done to make sure the information is flowing on the right path and there are no leaks.
4. Build secure identification, authentication, and authorization processes
This is one of the trends in fintech app security solutions.
When you create a fintech app, make sure to include a biometric authentication feature, in-built KYC functionality, and secure authorization.
All of these will make the platform that much more secure.
5. Utilize tokenization
Tokenization is a new technology.
What happens here is important information related to fintech transactions and financial product details are converted into tokens.
These tokens can’t be easily broken into or decrypted, thus, making it that much more secure.
6. Secure APIs and cloud servers
Just like we discussed one of the main security concerns is communication failure. And this brings us to secure APIs and cloud services.
So, how is it related? Let us explain:
To enable fintech transaction platforms to use APIs and servers for communication. And they hardly believe the other party due to common communication failure issues.
In order to solve this issue, secure APIs and cloud servers should be created and utilized.
7. Safety-oriented testing
If you anything about banking app development services, you know that testing is one of the most important parts of the entire process.
This is something that goes on for the entire development duration. And helps make sure the app is ticked in all the right boxes. However, strategies used by most companies are out-dated.
That’s why it is highly recommended that use testing processes that are focused around testing.
8. Ensure security measures in daily workflows
There is a lot of day-to-day maintenance and supervision work involved to keep a fintech app running. And most of it is related to the fintech app security.
Applying a guidance system and security measures in these day-to-day activities can highly boost overall security.
9. Good mobile encryption policy
Using a good encryption policy is a must if you want to create a secure fintech mobile application. For this, you can connect with people who are experts in fintech encryption.
10. Hiring the right development team
When you hire mobile app developers or fintech app developers, make sure they are up to the market.
The expertise of the development team will decide the performance and security of the final form fintech application. This is something that you should pay special attention to, for obvious reasons.
Best Technologies for Fintech Security in 2024
We discussed a lot of different ways to secure fintech applications. Now, here are some technologies that fintech app developers can use to create platforms that are super secure.
- Secure Access Service Edge – Also known as SASE, it is a cloud-based security model that uses network security functions along with wide-area networking capacities to secure the fintech solution.
- Artificial Intelligence – There are various ways in which AI and its daughter technologies can be used to secure fintech app solutions, one example we already discussed in the blog.
- Digital Currency – Cryptocurrencies and CBDCs can be super secure and add to the overall transaction security of the Fintech platform when done right.
- Regulatory Technology – with the need, multi-regulatory technologies have risen where platforms are asked to comply with standards and requirements, making platforms that much more secure.
- Multi-factor Authentication (MFA) – This is an age-old yet effective method to secure any fintech app. The extra layer can be biometric authentication, a PIN code, or something along those lines.
This is all you need to know about fintech app security issues and their solutions. Now, if you want to apply this knowledge to your concept or create a secure fintech app, it’s highly recommended that you consult an expert mobile app development company.
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