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In this article, we will discuss cybersecurity in fintech – why is it important and how to implement it? So, let’s start.
Importance of Cybersecurity in Fintech
Finance technology has gained a lot of popularity in recent years given the easy accessibility and flexibility it adds to the financial operations for common users. According to Allied Market Research, the global fintech technology market will be worth $698.48 billion in 2030.
The advancement in technological infrastructure and flexible regulatory laws as compared to those for the traditional banking systems are the main reasons. However, cyber threats remain a great concern for fintech software solutions.
Leniency in regulatory laws often results in the poor or incomplete implementation of security procedures by the fintech service providers. As a result, the fintech industry is often targeted by cybercriminals through various kinds of attacks including, malware, denial of service (DoS), distributed denial of service (DDoS), data breaches, etc.
This shows that although digital financial services are flexible and efficient as compared to traditional financial institutions, still their security is of utmost importance and concern. The end result of a cyber threat or attack is the same: loss of money, privacy violations, loss of customer trust, legal implications, and so on.
How to Ensure Cybersecurity in Fintech?
Use Secure by Design Approach
Try to make security your utmost priority in all stages of the software development life cycle from requirement analysis, design, to implementation, testing, and deployment.
A secure SDLC includes a security testing phase in all the stages of the development and not just at the end. It also includes code review while developing, software architecture review during the design phase, and penetration testing procedures before the final software deployment.
This security-first approach helps to find vulnerabilities and bugs in the software right from the beginning and ultimately leads to lower bug fix and resolve time. According to research by the IBM Systems Sciences Institute, a bug discovered in the maintenance phase costs six times more to fix than found in the design phase.
Read our guide on how to develop a secure fintech app for more details.
Develop Industry Complaint Product
Follow the compliance standards while developing fintech products such as an information security management system. Such compliance frameworks will ensure that you are following enough security practices for your business.
For example, the PCI DSS (Payment Card Industry Data Security Standard) framework ensures that financial service providers take measures to protect their products and services from intrusions and detect them timely.
Similarly, GDPR (General Data Protection Regulation) ensures companies clearly state their terms and conditions and make them easily accessible for their customers.
Use the Latest Technologies to Combat Cyberthreats
Software development technologies are continuously advancing. Cybercriminals are not behind in using it to exploit vulnerabilities and create sophisticated cyberattacks. To compete with such malicious practices effectively, you will need to keep your development practices up-to-date with the latest technologies.
For example, like in many other fields, AI and machine learning are helping better understand the data and derive useful insights from it. Fintech products can use ML to analyze any malicious activity and detect intrusions efficiently.
Financial institutions like Master Card are already using artificial intelligence to flag vulnerabilities, detect and prevent financial fraud, identity theft, etc.
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Blockchain is another cutting-edge distributed technology that helps in building secure and safe networks. It stores data in cryptographic hashes that make it immutable. Moreover, the data is stored on all nodes that are a part of the blockchain network. Hence, there is no single data storage or failure point.
Regulatory technology (regtech) is also getting popular in the fintech sector. Regtech helps to better maintain the big data in the financial industry and also make it compliant with the government standards. It uses techniques like encryption to secure user data, etc.
Build a Competent Team
Partner with security engineers right from the beginning so they can help investigate and find out bugs and security vulnerabilities in your fintech product from the start. Invest in security professionals who have experience and expertise in developing and testing fintech solutions.
They should be well-aware of continuous integration/continuous development (CI/CD), agile development practices, cloud configurations, carrying out elaborate threat analysis and modeling, undertaking test procedures at all levels like application, network, etc.
Planning to Invest in Security of your Fintech Product?
As the fintech industry is booming, so is the concern for its cybersecurity. Cyber attacks like spoofing, phishing, and data breaches cause a long-lasting effect on the user experience and customer trust. If you, as a CEO or CTO, are thoughtful about your fintech product or service security, you are rightly so.
This is the right time to ensure fintech cybersecurity by adopting the right practices. Make use of the latest technologies as they are more efficient against the ever-evolving cyber threats and make your fintech product industry-standard complaint.
Incorporate security measures right from the beginning of the product design and development stages. For this purpose, you will need the right talent. Engage with experienced software development professionals who have expertise in developing secure fintech solutions.
DevTeam.Space can help you here. Our field-expert software developers are experienced in developing market-competitive software products using cutting-edge technologies including machine learning, blockchain, etc.
You can write to us your initial fintech security and development requirements via this quick form. One of our project managers will get back to you for further project planning, management, and development with our high-quality software developers.
Top FAQs on Cybersecurity in Fintech
Cybersecurity in fintech startups ensures the safety of digital products from cyber attackers and malicious cyber incidents like malware, virus, targeted attacks like DDoS attacks, etc.
Fintech cybersecurity is important because fintech products often make use of users’ sensitive data and link with users’ bank accounts for efficient online transactions. In case of a cyber-attack or a security breach, all this sensitive information is at stake. Fintech security secures such information from misuse by cybercriminals and also ensures users’ trust in fintech companies providers.
For effective cybersecurity of your fintech products and services, incorporate security measures from the design phase and each software development stage. Ensure the product meets the complaint standards set by the industry. Moreover, partner with experienced professionals to develop and test your fintech product for all the potential cybersecurity threats.