According to the 2019 Study by Ponemon Institute, capital market firms and Banks spend approximately $18.5 million every year to combat Cybercrime. When consulted during the Sixth Annual Bank Survey, 70% of Banks traced their highest concern to Data Security in FinTech. Every year, the estimated annual cost of hacker attacks for most FinTech is $18.3 million per financial service provider, that’s definitely an overwhelming sum.
Developing a Fintech software that incorporates the above Cybersecurity is not easy, building trust as a customer is understandably heart skipping too for we suffer to gain financial assets, but saving them shouldn’t stress us too.
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Since most FinTech firms spend this fortune in combating Cybercrime, Cybersecurity then would unarguably be a topic of serious concern not just to FinTech firms but to the end target- their customers.
This article discusses the above topic and a world-class solution.
Modern-day challenges and Risks facing FinTech
Take a look at some challenges Fintech organizations faces in our modern-day.
Management of Clients’ Identity
It is an open secret that data sharing in FinTech exposes your financial, Heath data, and contacts, with serious concern of what may be of such high volumes of personally identifiable information collected by these financial firms especially when you delete such Fintech accounts of yours.
Issues with Cybersecurity
With such amount of information released to FinTech Organizations such as listed above, it is easy for hackers to leverage the system’s weaknesses to defraud customers and perform data theft.
Financial Technology applications are always bound to comply with regional data protection regulations. A good example is the European Union’s GDPR (General Data Protection Regulation) which all financial service providers in the EU must abide by.
This would mean Fintech firms fully understand Local privacy legislation of every region they get to, but it can place some limitations on the amount of data your FinTech software can collect and process.
Cybersecurity requirements for FinTech applications vary based on your company’s location and targeted markets. Let’s look at the most common regulations for data protection in the financial services industry:
GDPR as discussed a bit earlier is a set of rules for protecting privacy in FinTech applications that process information about the European Union’s residents.
Often misconstrued with the GDPR, the revised Payment Services Directive (PSD2) regulates electronic payment services activities in the EU to help banking services secure their tech.
Electronic Identification and Trust Services is another EU regulation for cross-border electronic transactions.
This is the abbreviation for the Financial Conduct Authority that coordinates financial services in the United Kingdom which FinTech service providers must register.
- Good Practice Guide (GPG13):
UK’s official security framework targeted at Cybersecurity, intrusion detection systems, etc.
- The Personal Information Protection Act (PIPA)
This regulates private data security measures for private and governmental organizations in South Korea and any violator is bound to face financial fines and criminal liability.
- Payment Card Industry Data (PCI DSS)
- ISO/IEC 27001
(A set of FinTech security standards for information security) etc
How Cybersecurity aids in a protected Fintech
In this highly evolving technological world with evolving Cybercrime, let us see how Cybersecurity can assist Fintech in its pounds of Cybercrime.
Data Encryption and Tokenization
To Encrypt means to encode information into a code that requires special keys to decipher it into a readable format. Critical data can be highly secured with complex encryption algorithms, like:
This is a highly secure asymmetric algorithm with public encryption and private encryption key.
This freeware algorithm encrypts data into 128-bit blocks.
Triple DES is Fintech developers’ preferable encryption option for encrypting credit card PINs. It divides data into 64-bit blocks and ciphers each one three times.
Tokenization on the other hand is a process of replacing sensitive data with a generated number (token). You have an option of decrypting the original information into a readable format by using a special kind of database known as token vaults.
For a even more secure Fintech application, developers could encrypt the token vaults.
This refers to Role-Based Access Control that aids in varying access level, so that ordinary employees and end-users cannot gain access to cooperate information.
Secured Login in Fintech’s Cybersecurity is as crucial as breath is in nurturing life.
See below some strict password policies of Cybersecurity:
(a)One-Time Password (OTP)
Each time a user wants to login to his Fintech account or complete a transaction, the application automatically generates a dynamic limited-time password to provide additional security.
(b)Compulsory password change
A little colog inise in password gives hackers an open room to perform their theft. So, most online banking applications usually enforce resetting of users’ account passwords often within three to six months.
This helps to prevent data breaches by blocking an account after several suspicious transactions or failed log-ins using a tracking system.
(d) Short log-in period
Even if a hacker eventually shortcuts all the above security measures and gains access to users’ accounts, he’ll have limited time to capture significant data because of a limited time session.
(e) Adaptive authentication
Imagine a hacker clones your smartphone. Well if that happens this Cybersecurity measure helps your system analyze users’ behavior and detect any suspicious activity.