Design, speed, and simplicity are the winning flavors for any mobile banking app. By possessing these characteristics, the fintech app can entice any smartphone enthusiast, the number of whom is steadily increasing. The industry’s major mobile app development company players recognize that the pervasiveness of mobile phones in our lives must be used as a tool to win loyal users for FinTech businesses.
Fintech companies, often originating as startups, are active in the realm of technological advancements related to the financial and banking sectors, along with the services they offer. These services encompass a wide spectrum, including online payment-based business financing, savings management, loan provisions, bank account integration, and more. But are these services secure enough? Well, that’s what we are going to talk about in this article.
As mentioned earlier, design, speed, and simplicity are the winning streaks of Fintech, but another S that must be a mandate is fintech Security. According to statistics, 2021 witnessed more than 92% of victims of cyber threats in the fintech applications industry. And the same has been experienced from 2022 till now.
The architectural style of financial apps is typically vulnerable to serious mobile banking security flaws that can result in financial security breaches. A mobile-based Internet banking app is essentially a piece of software that is directly linked to the bank’s backend service via Application Programming Interfaces (APIs).
In general, such APIs are built on open-source code, which would be beneficial to app developers. However, such APIs can sometimes introduce security vulnerabilities into mobile banking applications.
The ironic part is that webapp security systems or source code safeguards may not be able to reduce or close these gaps. Hackers of online and mobile banking systems can reap the benefits of machine-to-machine interactions by establishing their own shadow APIs. Contrary to popular belief, these shadow APIs don’t really resurface as vulnerable endpoints.
The 3 major risks associated with fintech security:
When it comes to protecting mobile banking services in fintech, app ownership is amongst the most threatening vulnerabilities. In this particular instance, there are typically two owners: one peripheral owner and one who performs for the bank. The bank’s IT unit is another holder of the app. Aside from that, an exterior entity is engaged in the development of mobile banking apps and the governance of its APIs.
Because the above-mentioned three owners share the responsibility, this type of ownership raises serious security issues. As a result, there is a high likelihood that something will probably go wrong at anytime.
Every type of mobile app you utilize stores your data in someway. Because the data in the fintech services sector is so sensitive, storage solutions must be extremely secure to prevent vulnerability. This is the first line of defense against financial data leaks or application code loss, as well as combating insecure storage space. If your internal storage has a security flaw, hackers can gain direct access to your sensitive information and exploit it to their benefit.
External data sources such as NFC, Bluetooth enabling, servers, various authorization mechanisms, as well as authentication tokens, must be communicated by mobile apps. You cannot eschew this communication; or else, the app will not function properly. However, by leaking your data, this activity may pose a mobile security risk to you.
So, these were the various security vulnerabilities that credit unions, financial firms, as well as banking institutions encounter. Thus, security measures should be a crucial aspect of development, especially in the case of Fintech. You cannot take the risk of losing customers’ privacy as well as consumer trust.
Building a reliable app’s logic entails incorporating security into every step of the app’s usage. It is well worth the effort to plan your security ahead of time and to keep an eye out for any prospective gaps in the implementation. Create well-written algorithms and inspect the code for flaws or security breaches. Finally, test everything to ensure that the security is effective. Ensure encryption at every major step and especially during transmission.
Usually, cybercriminals create clone apps exactly similar to the original ones to collect the personal details of the users who are not aware of the fraud. To avoid this, Fintech apps must use code obfuscation which involves encryption, eliminating metadata that is prone to vulnerability, using false tags, and adding meaningless code to an application binary that intends to distract the attacker from relevant content.
As a Fintech app, keep yourself updated with all the major user activities like user IDs, device data, IP addresses, geolocation, and transactional activities to stop miscellaneous cyber attacks. For this, Artificial Intelligence and Machine Learning can be used to keep a 24/7 check on users’ behavior to monitor usual patterns and unusual acts. An instance would be to block suspicious transactions from an unidentified & unusual IP address.
The most common indication of security vulnerability is a lack of authentication and appropriate identifiable measures. Fintech apps need to be double sure of the fact that cybercriminals are not able to access personal details through misrepresentation. This includes a three-step process:
Tokenization is the process of replacing sensitive data that needs to be protected with a newly generated random string of symbols known as tokens. Only authorized users to have access to a unique database called a ‘token vault,’ which stores all the links between the original data as well as the generated token. Tokenization facilitates PCI compliance by protecting data within organizations and online transactions.
The most important security measure for a Fintech app is a secure infrastructure. Application programming interfaces (APIs) and cloud servers are frequently targeted by cyber-attackers as possible weak links. But back-end security can prevent data discharge. Developers must also have a plan of action in case a security flaw is discovered. For this, the number of third-party automation should be limited. You can also consider building these components from the ground up. Choose components from reputable partners and vendors if you require some advanced functions.
Fintech app security necessitates extensive testing all through the development life cycle, as well as a few additional stages. Regardless of the time restrictions, you must focus on ensuring that your Fintech application is assessed with utmost precision as well as safety protocols at every stage. Always double-check all potential identity verification, authorization, application performance, and data security flaws. Check in real-time to ensure that the application is functioning properly and that all necessary frameworks and techniques are in place.
Personnel who are careless or are not properly informed about system misconfiguration, and dropped devices are the most harmful threat to an entire organization’s security. Personnel should always be asked to use corporate hardware when accessing the said back-office or development-related interfaces to avoid any data breaches from the employees’ end. Internal attacks can be mitigated by properly configuring routers.
Also, ensure a quick and easy recovery in case a threat is detected. And try being transparent to your customers about the security of their data and transactions, solicit and analyze their feedback, and track their app usage patterns.
Mobile databases should be encrypted to prevent local information from being stored. If you want your users and the mobile application to process data with many variations, you must concentrate on gaps, even if the data is only temporarily stored. Pay special attention to the design level as well as the efficient oversight and management of the encryption keys.
The work suits in the hands of the one skilled to do it. Thus, investing in an experienced programmer is one of the best strategies to avoid security attacks for Fintech apps. A professional and experienced vendor will ensure security and precision at every stage of programming as well as throughout the lifecycle of the Fintech app.
SASE, which stands for Secure access service edge, is a network system that integrates VPN and SD-WAN competence with cloud-native security mechanisms such as secure internet gateways, cloud security brokers, firewalls, as well as zero-trust network access. In addition, the SASE architecture assists in network traffic analysis and detects malicious digital data in fraudulent transactions, malware, and so forth.
Machine learning is now being used by fintech companies to fully understand financial data and security mechanisms. AI algorithms can track network traffic databases and assist in the detection of malicious data streams, intrusions, and other threats. AI also assists in the detailed analysis of customer data in order to determine potential clients’ weaknesses, advantages, and so on. This assists businesses in avoiding risky customers as well as future illegal dealings.
Cryptocurrency -the digital currency, is at its peak now-a-days. It is an important component of decentralized finance frameworks based on blockchain technology. The ease, convenience, and speed with which digital transactions can be completed are surprising to the industry, but the security integration of the digital currency is the most beneficial aspect of the Fintech industry.
Reg Tech (Regulatory Technology) is the use of new technology to help businesses manage compliance with regulatory requirements. This technology provides users with artificial intelligence, machine learning, as well as blockchain technology, among other things, to assist businesses in understanding regulatory obligations and monitoring their content to ensure fintech security compliance.
Fintech, which is the future of banking and financial investments, should not be overlooked in terms of security. Data and privacy issues are still going to haunt everyone in the industry. The only thing that is in your hand is to PREVENT!
Keep track of the above-mentioned FinTech app security measures throughout the lifecycle of Fintech apps to ace up the market. But taking measures is not the only thing that you should focus on. One of the most important steps is to take the helping hand of an experienced FinTech app development company like us. We have got a team of professionals who can build your Fintech app considering all the security measures with utmost ease and efficiency. So, get in touch with our experts right away!
The top Fintech App Security Solutions that you can follow for your upcoming projects are securing code and architecture, using code obfuscation to prevent cloning, AI and MI integration to track user transactions, building secure identification processes, tokenization as well as integration of secure APIs and cloud servers for safety-oriented development and testing.
The absence of unified app ownership, risky data storage, and communication breakdown are among the major security risks and challenges that major fintech apps face. Cyber threats and clone identity reveals are the additional challenges being posed to usual fintech apps.
The Fintech industry entails hundreds to millions of transactions within minutes. Thus, it is always a major concern to keep all the transactions and identification secure and authorized to reduce the risk of getting cheated with the concerned amount! That’s why integrating Fintech app security solutions and technologies while developing your application can help you avoid all these challenges to a great extent!