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Are Fintech Banks Safe – Transfers, savings, financing and payments have gone digital, just a few clicks away from queuing and possibly using Touch ID.
With so many fintech apps available these days, the need to visit real banks has diminished. As someone involved in the Fintech domain, you know that this industry is growing rapidly and is attracting a large number of startups, investors and cybercriminals. Fintech infrastructure takes different forms, data processing methods and customer relationships. However, standards and requirements have changed a lot, one of which is fintech security.
Are Fintech Banks Safe
As a solution architect, I have faced some of the biggest security challenges in fintech products. Today I’m going to share with you the best fintech application security solutions for these new cyberspaces and provide you with a list of fintech security tips.
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Before we continue, let’s make sure we’re on the same page with the fintech security requirements we’ve covered in this article.
A cyber attack/cyber security attack is the act of gaining access to a computer system, software or network in order to destroy, destroy or take control of systems or to steal information stored on those systems.
Data breach/data extrusion is the ability for an unauthorized third party to access, view or steal data held by a party.
Fintech security practices are information security standards used by fintech organizations worldwide to build their information management systems. It consists of guidelines, frameworks and development initiatives that help fintech organizations protect various types of data from cyber attacks.
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Regardless of whether the financial transaction is in a bank or online, banks are always vulnerable to fraud. Important information can also be disclosed due to simple human errors or problems of a technical nature.
Regardless of the reason for the information leak, it can destroy your company’s reputation in an instant. This leads to irreparable financial damage and loss of intellectual property. Below I’ve compiled some cyber security numbers, not to scare you, but to show you the importance of always being vigilant and protecting your software.
Are you planning to open a new bank that uses the latest technology and offers only digital banking services? Read our article on how to build a neobank to benefit from our experience.
Whether it’s extortion or ransom, your company is liable for the loss or corruption of customer data. When it comes to finances, there are challenges in developing fintech software and we must remember the vulnerability of all processed data. So let’s look at some of the risks.
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This can happen when someone steals personal or financial information so they can get what you, a friend or a client has given you, such as bank account credentials. Given the risk that anyone can become a target for identity theft, it’s hard not to recognize the importance of network access and distribution of certain functions among employees. Identity theft can also lead to a chain of additional problems such as phishing or theft, which can lead to significant data and financial losses.
Good news does not travel as fast as bad news. If your customers are happy with your fintech app, they will continue to use your product. Moreover, they recommend it to their friends. But imagine a situation where customer data is compromised: not only will you lose the customer’s trust, but you will also lose the trust of other potential users.
I was reminded when I lost or stole my data. If a fraudster can read the data, it can be misused. And hackers don’t need much effort to read and use stolen data if it’s simple or poorly secured. All in all, it once again leads to a breach of customer trust, reputational problems and lost profits.
This is the biggest security problem we often show our customers. The bad news is that any system can be hacked, but the good news is that the extent of the loss, as well as the time and money to recover, depends on the level of fintech security.
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So let’s go ahead and list the best Fintech security methods we use.
Starting a fintech business? Check out our article on how to avoid 5 common fintech mistakes and increase your chances of success.
Below, I’ve compiled the best security practices for fintech application development and listed them in order of importance. So let’s start with the important ones.
Data loss is not always an external threat, but can also be the result of human error or hardware failure. Making a copy of important data prevents it from being lost completely. To save as much data as possible, ensure that important files are backed up regularly, and save edited and modified data.
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Data encryption is a secure security practice that prevents unauthorized eyes from reading your data. By encrypting data, we protect against unauthorized external access to the storage.
It is common security practice to assign permissions to your colleagues based on their position in the company. A certain level of access to information and various functions does not show your reliability, it increases the efficiency of work due to the reduction of administrative work.
Expert tip: Create administrator, read-only, and developer roles and control permissions assigned to those roles. Intelligent penetration tests
Security unit tests are one of the most important access control security practices. Unit tests are essential for every fintech project. We do this to ensure that the user sees the correct screen and the administrator sees the correct screen. This is very sensitive information and there is no room for error.
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Fintech software often uses third-party software providers. This software sometimes has its own weaknesses and bugs that can be exploited by cybercriminals for hacking, making it full of security flaws. Hackers can launch a so-called supply chain attack where they compromise a third party to gain access to information.
I recommend researching third-party vendors before using them and monitoring them regularly during implementation. This will help you identify the weaknesses of your project and highlight the areas where it could be affected.
We use AWS KMS to store sensitive credentials and transfer encryption keys. We may also look for other ways to meet your product needs and business requirements, but Amazon Security Lake covers all important needs.
Why is key management important? It’s just a matter of keeping user data safe and secure without getting technical.
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Just like a physical bank, you have one “place” to access your internal resources that is easy to control and secure. If you detect unauthorized access, restrict access to prevent fraudsters from accessing files.
Expert tip: You need access to internal resources, databases, etc. If you need access, have a controlled access point (aka VPN)
Collecting the IP and device IDs of users visiting your website is a simple step to detect unwanted access. The information you can track depends largely on the category of fintech applications (e.g. payments, loans, money transfers, banking). You are not free to monitor all information and you need to be very specific here to avoid collecting sensitive information from users.
📲 We offer full-cycle financial software development services, from creating product development strategies to implementing best-in-class fintech services. Check them out to build a 100% secure fintech app that’s fast and affordable.
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Some fintech products, such as neobanks, are not directly regulated. Instead, a neobank or other fintech applications collaborate with a regulated entity.
In order to have the most important regulations, laws and guidelines relevant to Fintech business, I have gathered them in one place.
Fintech security is key to the financial industry as it determines the success of your business. If you offer your users a reliable solution, they will stay with you, or you will have to deal with unhappy users, security issues and lawsuits.
Therefore, in order to gain new customers and win their trust, your fintech business must have a fintech security system in place to prevent cyber security attacks and cybercriminals from stealing customer data and financial information.
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Thinking like a hacker is of little help if sensitive data is stolen, compromised or misused. The security measures I’ve listed above work as intended, reducing the likelihood of cyber attacks or at least their impact on a compromised theme, as well as other factors that may have access to your database.
If you have a fintech project and are unsure about the level of security or need advice, feel free to contact our team. We are happy to share our experience with you.
With over 8 years of experience, we have helped 200+ companies design and build mobile and web applications.
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