The financial technology sector has experienced an enormous uptick over the past few years. The popularity and user base of digital payments and mobile banking apps have skyrocketed as an ever-growing number of users prefer to transact online. Unfortunately, this increase has triggered a global wave of cybersecurity breaches targeting money and valuable data.
It should go without saying that all app developers—fintech and otherwise—should integrate comprehensive anti-cyber attack software in their applications. Yet, only 5% of companies’ folders are sufficiently protected.
There’s no doubt that cybersecurity in fintech is lacking. But what can be done to change this? Gaining a better understanding of the security best practices for fintech application development and the kind of risks this industry is facing right now is a good place to start.
How Important Is Cybersecurity When Developing A FinTech App?
In short, very. Apps that deal with sensitive data are highly attractive to cyber hackers, and the fintech industry is jam-packed with them. Products like mobile banking, cryptocurrency exchange, Banking as a Service (BaaS), and insurance are all types of fintech that hold users’ private financial information.
Cyber hackers who are looking for an easy target are going to head straight toward any fintech app with low cybersecurity standards.
Some of the most common cybersecurity risks facing fintech apps in 2022 include:
- Malware
- Phishing
- Ransomware
- Distributed Denial of Service (DDoS)
Poor cybersecurity makes an entire system vulnerable and puts it at risk of getting infected by destructive malware or ransomware. Some of the most common consequences of these infections include data loss, non-compliance fines, reputational damage, ransomware extortion, lawsuits, and productivity loss due to downtime.
Although fintech cybersecurity methods are evolving, they are not being used enough—and hackers are developing their own methods of countering them at the same time. It has never been more important for fintech apps to upgrade their cybersecurity measures.
5 Security Best Practices for Fintech Application Development
The consequences of inadequate cybersecurity are not being taken seriously enough by fintech companies— or any type of company—as we enter the golden age of cyberattack technology.
To avoid losing invaluable data, incurring huge fines or losing large sums of money, or indelibly scarring your company’s reputation, fintech app developers urgently need to adopt better security practices. Some of the most effective ones in 2022 include the following:
1. Role-based access control
Also known as RBAC, this approach limits access to your network based on each individual’s relationship to the business. For example, you might assign the following roles the highest level of access to data:
- IT specialist
- Organizational manager
- Administrator
- Online support staff
In terms of security best practices for application development, RBAC is one of the simplest and most effective steps you can take to prevent the occurrence of a cyberattack.
Because most security breaches happen as a result of human error negligence, this method ensures that only those with extensive knowledge of the necessary security measures have access to important data.
2. Multi-factor authentication
The more layers a hacker has to get through, the more off-putting the process will be. Multi-factor authentication entails setting up multiple, individual layers of authentication that only a trusted few employees can get through.
Some examples of authentication you could input into your fintech app system include a phone number, fingerprint ID, face/retina ID, email, and a secure password. It’s important to integrate these authentication factors into fintech product development for tighter security.
3. Data encryption
Data encryption is a highly effective security practice for apps in the financial sphere. By developing intricate encryption algorithms, you can protect critical data from being stolen by cybercriminals. Some of the most effective forms of data encryption algorithms include:
- Twofish – A popular “freeware” type of algorithm that is designed to encrypt data into multiple 128-bit blocks.
- RSA – Using asymmetry as its guise, RSA encryption algorithm protects data with a secure encryption key. The acronym comes from its three developers, Ron Rivest, Adi Shamir, and Leonard Adleman.
- 3DES – Most commonly used for apps featuring private credit card PINs. 3DES divides data up into 64-bit block ciphers and then encrypts each one three times.
The more heavily encrypted your data is, the harder it will be for hackers to penetrate. These encryption algorithms may be complex, but they are well worth the installation. As far as maintaining security best practices for fintech application development go, they’re essential.
4. Perform regular vulnerability testing
One of the most important steps any fintech app company can take in terms of KPI for product development is to perform regular, thorough vulnerability testing on their system.
Because of how quickly hackers evolve to beat common encryptions, companies need to consistently review and update their approach to security. By building a professional testing team and following current cybersecurity trends, you can drastically improve fintech product development and safety.
5. Use a trusted cybersecurity company
In the past when cybersecurity was only just becoming a necessity, development teams could get away with just having one or two security specialists on the team. But in today’s cyberattack-heavy world, you need serious reinforcement to prevent breaches from happening.
Hiring a company that specializes in proper fintech cybersecurity will not only keep your and your user’s data safe, but it will also allow the other members of the team to focus on their individual roles.
Round-the-clock security focused on each aspect of your fintech app is the only way to establish safety for your sensitive data—and a trusted cybersecurity company can deliver that.
How Kunai Can Improve FinTech Product Development
Kunai is dedicated to providing support, security, and consultation for companies within the financial services industry. Trusted by thousands of clients internationally, Kunai prides itself on helping developers find effective security best practices for fintech application development.
If you are a fintech or app developer seeking to boost your security protocols and reduce the likelihood of a data breach, opting for an experienced company like Kunai can provide a solid ground to stand on.
With Kunai, you can get help finding skilled technical staff, onboarding new developers, and building up a financial services system that protects both users and developers from cyberattacks.
Get in touch with us to learn more.