Cybersecurity in Fintech: How to Build a Secure Fintech Application?

Why Build a Secure Fintech Application?

While fintech technology brings numerous advantages, it also introduces potential fintech cybersecurity risks. Security in fintech is a necessity, as breaches grant malicious actors access to valuable data. 

For instance, in 2022, a data breach affected fintech start-up Revolut, exposing the personal details of over 50,000 users, including names, addresses, and partial payment card information. This highlights the critical need for robust fintech app security in financial software development.

Here are a few reasons why fintech cybersecurity is important:

Safeguarding Sensitive Data

Fintech organizations handle a wealth of sensitive data, including bank account information, transaction records, and personal details. Protecting this data is important to thwart cybercriminals.

Enabling Secure Data Sharing

Fintech cybersecurity ensures secure and seamless data sharing among stakeholders. Consent mechanisms and robust data encryption techniques are vital to maintaining data security and privacy during sharing.

Managing Digital Identities Securely

Fintech companies rely on digital identities to provide an integrated customer experience. Robust cybersecurity prevents cyber attackers from exploiting digital identity vulnerabilities.

These points provide clear insights into the significance of cybersecurity in the fintech industry.

What are Some Fintech Cybersecurity Challenges?  

As per Statista, 43.5% of US consumers now prefer mobile banking, making it the dominant choice for accessing accounts. This shows how important it is to address fintech cybersecurity challenges to ensure a hassle-free and secure user experience.

Here are five key cybersecurity challenges to overcome:

• Identity Theft

Identity theft is one of the significant challenges in fintech cybersecurity, where cybercriminals may steal personal information to impersonate individuals. The authentication methods such as one-time passwords and biometrics are not foolproof. They can be replicated leading to unauthorized access to accounts, financial fraud, and reputation damage.

• Malware Attacks

Malware, including viruses and ransomware, can infect fintech systems, compromising security. Through various entry points such as pop-ups, email attachments, and third-party software malware can infiltrate the system.

 They can steal data, disrupt services, or demand ransoms, posing a significant threat to both the company and its users.

• Money Laundering Risks

Fintech services can inadvertently facilitate money laundering. Also, the widespread adoption of cryptocurrencies, with their decentralized nature, creates vulnerabilities for their use in illicit activities. Tracking the sources of funds in cryptocurrency transactions can be extremely challenging.

To address these risks, it's crucial for financial institutions dealing with cryptocurrencies to exercise caution and implement robust cybersecurity measures. 

• Third-Party Risks

Fintech often relies on third-party service providers for various functions. These dependencies can introduce vulnerabilities if the third party's cybersecurity isn't robust, potentially impacting the fintech company's security.

Fintech cybersecurity companies need to conduct thorough security checks of third-party vendors. This ensures a high level of security of user data. 

• Compliance

The fintech industry is subject to a complex web of regulations, including GDPR and PCI DSS. Compliance is essential to protect user data, combat financial crimes, and ensure transparency in the financial sector.

Non-compliance can lead to legal consequences and damage the reputation of fintech companies. Fintech companies need to comply with all applicable compliance standards to avoid unwanted outcomes. 

5 Steps to Follow for Building a Secure Fintech Application

As we all know Fintech companies are losing money due to data breaches and other cyber security threats. It is important to follow an agile digital wallet app development process for your app's security and success. The steps include:

• Security with Product Ideation 

Similar to mobile app development make sure to begin with security from the product consideration phase. With thorough market research, ideation, and competitor analysis make sure you research about the potential threats that you might face after app deployment.

• Determine Features and Functionality

Moving to the next step make sure you determine the core feature and functionality of your fintech app. Basic features like user sign-up/ login,  account management, push notifications, and efficient transactions contribute to mapping the development cycle.

• 2-factor authentication and Data encryption

2FA adds an extra layer of security by requiring users to provide two forms of identification before accessing their accounts. This can be made mandatory for accessing critical data, ensuring robust user authentication.

Also, Data or end-to-end encryption for all data passing through a fintech app safeguards the application from network breaches, ensuring that even if data is intercepted, it remains secure and unreadable. 

Security measures like 2FA and encryption are fundamental for the protection of user accounts, transactions, and sensitive financial data in the FinTech sector.

• Develop, Test, and Deploy 

The next step is to bring everything together for the fintech app development process. Use the right tech stack and expertise of the fintech app developers to build a secure fintech application.

After development, it is time to test the application for any potential bugs and vulnerabilities. This ensures that the app is ready for deployment on the chosen platform like iOS or Android.

• Maintenance and Updates 

After the app launch, it’s important to address the issues regarding maintenance and updates based on user feedback and app performance. It is important to assert usability and stay up-to-date with security standards to improve the app’s capabilities based on market trends.

Also Read: AI in Fintech App Development: Use Cases, Challenges, and How to Get Started

Top-Notch Fintech App Security Solutions  

• DevSecOps

DevSecOps is an integral approach that embeds cybersecurity into the Software Development Life Cycle (SDLC), ensuring continuous security.  With its focus on automation and collaboration, DevSecOps streamlines the identification and mitigation of vulnerabilities throughout the FinTech cybersecurity development process.

It's vital for creating a secure digital environment where security isn't an afterthought but a foundational aspect. 

• Secure Application Logic

Fintech cybersecurity strategies include implementing encrypted password policies, and fortifying application protection. Features like brief login sessions, OTP systems, and adaptive authentication add layers of security, reducing Fintech cybersecurity risks.

By adopting these practices, fintech cybersecurity companies ensure the highest level of user identity verification and data protection of your app.

• Role-Based Access Control

Role-based access control offers a strategic approach to network security by regulating access based on user roles. This method empowers companies to mitigate both internal and external security threats by ensuring that users have the right level of access. It also simplifies user management, making it easier to grant and revoke privileges as needed.

• Secure Data Storage

Ensuring secure data storage is a fundamental step in building FinTech app security solutions. The principle is to keep the application's architecture simple and safeguard sensitive information from potential theft by hackers.

By adhering to minimal data storage and robust encryption, fintech apps minimize the risk of data exposure and breaches.

• Secure APIs

Securing fintech APIs is the cornerstone of creating a safe environment for both customers and businesses. Banking APIs serve as vital conduits, enabling seamless communication and data exchange between software systems.

For instance, a personal finance app can leverage an Open Banking API to connect with a customer's bank and retrieve account information.

The above-mentioned practices collectively form a holistic approach to fintech cybersecurity solutions. Now moving ahead, let’s explore the cost of fintech apps promoting cybersecurity. 

What is the Cost of Fintech Cybersecurity App Development

There are several factors that influence the developing cost of a fintech app such as the chosen tech stack, type of fintech app, platform, app features, and functionality, the level of complexity, and the location of the fintech app development company. 

Keeping the above-mentioned factors in mind it is difficult to give a precise cost estimation of fintech app development. However, to give you an idea a basic fintech app can range from $35,000 to $75000 to develop.

On the other hand, a complex feature-rich app can cost $85000 to $180,000 or more. The increased cost is primarily attributed to the inclusion of advanced features.  

You can consult a fintech app development company for a quotation that suits your requirements. 

Work With Apptunix for Fintech App Development 

According to Wired, personal and financial records of over 850 million people in real estate transactions in the US were exposed due to a website design error. This serves as a stark reminder of the importance of meticulous fintech app development services. 

The demand for fintech apps will continue to surge, and businesses in this sector will face growing competition. To thrive and stand out in this dynamic landscape, fintech startups and business owners must prioritize security. 

At Apptunix, we've honed our expertise over a decade, developing secure fintech solutions for clients worldwide. We follow proven fintech cybersecurity strategies, creating high-quality and secure fintech apps tailored to your unique needs.

We also leverage the latest technologies, including AI, to their full potential while adhering to the best practices in fintech cybersecurity. This ensures that security is integrated at every phase of your project's life cycle.

Your success in the fintech industry hinges on the trust and security you provide to your customers.