How To Secure Your Fintech App
There are some industries where businesses need to focus heavily on securing customer data and transactions.
In such industries, delivering the app features and functionality is just not enough – it is information security that is of paramount importance.
The financial services sector is the most obvious example of such as industry.
Banks and financial service institutions operate under stringent regulations. Given that FinTech (“Financial Technology”) companies intend to serve this sector, they also need to fully comply with these regulations. Security is one of the primary focus areas of these regulations.
For more information, see our guide “How to build a FinTech mobile app”.
If you are a business leader or entrepreneur trying to make a mark in the FinTech space, security ought to be high on your priority!
Looking for help on how to secure your FinTech app? You have found the right guide. Read on!
The growth potential in the FinTech sector
The FinTech sector provides more convenience, advanced services, and better user experiences to consumers of financial services. This sector has significant growth potential, as you can see from the below pieces of statistics:
- The spending in FinTech rose from $13 billion in 2013 to $120 billion in the first half of 2019. Read “What’s next for fintech growth?” for more insights.
- A May 2019 report states that 42% of the payment companies and 54% of the banks are partnering with FinTech companies. The report also states that 84% of the insurance companies will increase FinTech partnerships over the next 3-5 years. Read “How the growth of Fintech is rapidly changing the world we live in” for more details.
“The elephant in the room”: Cybersecurity challenges in the FinTech sector
While the transformative potential of the FinTech sector is clear, it also faces a key challenge, and that’s cybersecurity. Consider the following:
- In July 2018, Equifax disclosed that hackers compromised 143 million accounts and stole sensitive information like social security numbers, telephone numbers, etc. Read more about this in “New cybersecurity challenges for FinTech startups”.
- The same report also states that FinTech companies like Citi Financial, CheckFree Corp, JP Morgan were impacted by cyber-attacks.
- FinTech companies process a significant amount of personal and proprietary data, therefore, they are lucrative targets of cybercriminals. You can read “Major FinTech cybersecurity, data security, and privacy protection concerns” for more details.
- FinTech companies need to enable seamless data-sharing between multiple stakeholders. They also need to manage customer access to a diverse set of solutions and services. Here, challenges like cross-platform malware contamination and insecure coding practices expose them to security risks, as you can read in “Security challenges in the evolving fintech landscape”.
Securing your FinTech app
I will now explain the various ways you can use for securing your FinTech app. These are as follows:
1. Multi-tiered authentication
Given the sophistication of the organized cybercriminal gangs and their ability to hack passwords, FinTech companies can’t solely rely on passwords to secure their customers’ data. When building a FinTech app, you must use multi-tiered authentication.
Multi-factor authentication (MFA) is a process where online users make two or more claims to prove their identity. An app using such an authentication process verifies all these claims, and only then it lets the users utilize a given service.
An MFA system can use a combination of passwords, the specific identifier of a device, fingerprint, etc. As you can read in “Benefits of implementing multi-factor authentication”, MFA has several advantages, e.g.:
- It strengthens security. While hackers can crack passwords by launching a brute-force attack, adding a biometrics factor into the authentication process will foil their plans!
- Many data security regulations insist on MFA, therefore, you have a better compliance posture if you implement it.
- By strengthening the login process using MFA, you can subsequently reward your users with simplified operations. E.g., once you have authenticated them using MFA, you can use “Single Sign-On” (SSO) so that your users can use multiple services with one login.
2. Data encryption
If you are launching a FinTech app, then using encryption to protect sensitive data at rest or in-transition must be a high-priority consideration for you. Many legacy technology solutions didn’t include data encryption, therefore, they don’t quite match up to modern-day security standards. Read more about it in “Why encryption is critical to FinTech”.
That’s the past though, and you can’t imagine building a FinTech app without encryption now. Encryption figures prominently when you build a security approach for your app, while the other building blocks are multi-factor authentication, real-time threat intelligence, and firewalls & antivirus solutions. Read “Encryption, authentication, or security certification—how to ensure FinTech data security” for more insights.
Encryption is the process of scrambling data, which keeps the information hidden from unauthorized parties. It uses modern cryptographic tools like cryptographic hash functions to convert plaintext to ciphertext, therefore, an unauthorized person can only see a random alphanumeric string. Only authorized parties can view the data, as you can read in “What is encryption? | Types of encryption”.
Encryption offers several advantages, e.g.:
- You can use encryption tools across several devices to protect your data.
- Many data security regulations mandate encryption, therefore, when you implement encryption, you comply with these regulations.
- Encryption protects data when people access it remotely.
- Since encryption protects data, you can have better confidence in your data quality.
- Encryption keeps one’s digital identity secure, which helps in maintaining privacy.
- You gain a competitive advantage by encrypting your data at rest and in transit.
- When your customers know that you are encrypting their sensitive information, their trust in your business increases.
Read “7 advantages of using encryption technology for data protection” for more insights.
3. Firewalls and antivirus solutions
Using a combination of robust firewalls and antivirus solutions is a key building block towards securing your FinTech app. Let’s understand the value each of them offers.
Next-generation firewalls are important to thwart web-based malware and intrusion attempts. These modern firewalls are more powerful than traditional firewall solutions since they offer better inspection capabilities and control over individual applications in a network.
Next-generation firewalls offer many advantages, e.g.:
- They provide integrated intrusion detection systems and intrusion protection systems, in addition to the features of the traditional firewalls.
- These firewalls have better capabilities to monitor traffic, therefore, they can determine what’s being sent or received.
- Next-generation firewalls use one integrated device to provide many capabilities, therefore, they streamline your infrastructure requirements.
- These modern firewalls include antivirus and malware protection, moreover, they upgrade them continuously.
- Next-generation firewalls can maintain a high network speed despite a rise in the number of services to protect.
Read more about these in “5 benefits of next-generation firewalls”.
You and the users of your FinTech app need to use a powerful antivirus solution that protects computers from viruses, spyware, malware, etc.
Hire expert developers for your next project
1,200 top developers
us over the last 3 years
Antivirus software provides many benefits, which are as follows:
- Market-leading antivirus solutions offer protection from viruses, spyware, malware, etc., moreover, they upgrade their robustness continuously.
- Good antivirus solutions protect you from “phishing attacks”, i.e., unauthorized attempts by hackers to steal or infect sensitive information.
- Robust antivirus software can protect your system/app from various other online threats.
- You can scan your devices with the help of antivirus software and implement a two-way firewall.
- Leading antivirus solutions protect you from intrusive ads and spam websites.
Read “What are the advantages of using antivirus software?” for more insights.
4. Using cloud computing smartly
You will very likely take advantage of cloud computing while building your FinTech app since managed cloud services providers offer many advantages. However, you need to use cloud smartly!
There are various cloud computing deployment models, which are as follows:
- Public cloud: In the case of the public cloud, a 3rd party managed cloud services provider owns and manages the cloud infrastructure. Organizations that use a public cloud share the computing resources with other organizations. Such multi-tenant models reduce cost, however, they may not be suitable for hosting sensitive data.
- Private cloud: A private cloud is a kind of deployment model where one organization exclusively uses computing resources. You can implement a private cloud in your datacentre or have a 3rd party provider host it. It costs more, however, you control the cloud infrastructure fully.
- Hybrid cloud: It’s a combination of public and private clouds. You can host data and applications with high-security requirements on a private cloud, and you can host the other data and applications on a public cloud.
Read “What are public, private and hybrid clouds?” for more insights. You need to judiciously choose the right cloud deployment model for securing your FinTech app.
5. Real-time threat intelligence
Earlier, organizations often reactively dealt with cybersecurity. They would typically get to know of a security incident after the lapse of a considerable amount of time, subsequently, they would respond to it.
Organizations are increasingly building real-time threat intelligence capabilities now, and the following reasons drive this:
- Their reputation suffers if they take long to detect a cybersecurity breach and respond to it.
- Early detection can help retrieve stolen credentials sooner.
- Regulations like GDPR mandate that businesses report a data breach within 72 hours.
Read more about this in “Real-time threat detection and why timing is the key to threat intelligence”.
If you systematically develop real-time threat intelligence capabilities, then you stand to gain significantly! Consider the following:
- You can take precautionary measures against new ransomware that cyber-attackers are developing.
- Knowing the cybersecurity threats real-time enables you to back-up your sensitive data, which will allow you to access uncompromised data in the event of a cyber-attack.
- You can patch vulnerabilities, which will ensure that cybercriminals aren’t able to exploit them.
- You can also educate your team on how to avoid phishing attacks and malicious attachments.
Read “The importance of real-time threat intelligence to combat today’s looming threats” for more insights.
6. Proactive mitigation of security risks
There is a considerable body of knowledge vis-à-vis application security risks, and experts have identified the top risks after significant research and analysis. The “Open Web Application Security Project (OWASP) top 10 application security risks – 2017” report identifies the following top risks:
- Broken authentication;
- Sensitive data exposure;
- XML external entities (XXE);
- Broken access control;
- Security misconfiguration;
- Cross-site scripting (XSS);
- Insecure deserialization;
- Using components with known vulnerabilities;
- Insufficient logging & monitoring.
The good news is that you can mitigate these risks by managing your software development project well, and by following the right software development and information security guidelines! Consider the following:
- You can mitigate the risk of insecure deserialization by accepting serialized objects with digital signatures only.
- Following the right coding guidelines will take you a long way towards mitigating risks like injection, XXE, and XSS.
- You can mitigate the risk of using components with known vulnerabilities by following project management best practices.
Read “Application security risks and best practices” for more information.
7. Embrace “Compliance-as-code”
You will need to comply with regulations like PCI/DSS, GDPR, etc. Complying with these can be challenging since organizations have silos between their information security, development, and operations teams.
This doesn’t only diminish your ability to comply with regulations, but it can also result in security vulnerabilities. You can address this by embracing “Compliance-as-code”, which is the process of integrating compliance and auditing directly into your DevOps processes.
With this, you translate security controls into code and templates and break the silos between the information security, development, and operations teams. You can incorporate compliance testing early in your CI/CD pipeline and automate many of the compliance testing tasks. Read more about this in “Compliance-as-code: Addressing compliance challenges through automation”.
8. Secure your APIs
You will likely design, develop, and consume APIs as part of building a FinTech app. Cyber-attackers frequently target APIs, and hacked APIs contribute significantly to data breaches. You can secure your APIs by the following means:
- Use authentication tokens.
- Encrypt your data and use digital signatures.
- Proactively identify and address API vulnerabilities.
- Use quotas, throttling, and API gateways.
You can read more about this in “What is API security?”.
Wondering how to develop a secure FinTech app?
While this guide can help, remember that developing a secure FinTech app requires considerable information security, project management, and software development expertise. Consider engaging a reputed software development company to develop such an app, and consult our guide “How to find the best software development company?” to find one.