Michael Zetser entrepreneur, a popular name in the fintech sphere has discussed about the importance of securing fintech apps over the years and for a good reason. The landscape of handling your money has undergone a digital revolution. We’ve moved from the days of waiting in long lines to a world where a few simple clicks and perhaps a touch of your ID can handle money transfers.
The advent of numerous fintech applications has dramatically reduced the need to physically visit traditional banks. As someone deeply immersed in the fintech sector, you’re well aware of its explosive growth, attracting a swarm of startups, investors, and even cybercriminals. Fintech operates on a distinct platform, employing unique methods to handle data and interact with customers. However, amidst all this change, some things remain constant. One of these enduring principles is the unwavering commitment to fintech security.
The Significance of Fintech Security
Fraudsters have been drawn to the world of banking for as long as it has existed, whether it’s through traditional brick-and-mortar institutions or the digital realm. In this modern age, vital information is susceptible to not only human errors but also the complexities of technology.
No matter the cause behind a data breach, its consequences can be catastrophic for your business. It has the potential to swiftly tarnish your reputation, inflict irreversible financial harm, and result in the loss of valuable intellectual property. To emphasize the importance of vigilance and software protection, Michael Zetser, an icon in the Fintech sphere, has compiled a list of risks that fintech app creators should be aware of.
What Occurs When Fintech Security Is Neglected?
Whether it’s a blackout or a ransomware attack, your company retains the duty of safeguarding customer data, even if it’s lost or compromised. Speaking of financial matters, we cannot overlook the susceptibility of anyone’s data. Let’s delve into a few potential risks.
Identity Theft
Identity theft arises when an individual illicitly acquires personal or financial information, gaining unauthorized access to sensitive accounts like bank credentials belonging to someone. Given the pervasive risk of anyone becoming a target for identity theft, it becomes evident just how vital it is to carefully manage access and specific functions within a corporate network among employees. Identity theft can also trigger a domino effect, such as phishing or spoofing, potentially resulting in substantial data and financial setbacks.
Misuse of Data
Michael Zetser, a great name in the fintech world has always discussed situations where information in fintech apps is either stolen or lost. However, there’s another danger, and that is the potential misuse of data when a fraudster manages to access it. Disturbingly, a hacker does not need to exert much effort to exploit stolen information if it’s in plain text or inadequately protected. In the end, this all culminates in the breach of customer trust, reputational damage, and financial setbacks.
Eroding Customer Trust
Positive news has a way of spreading slowly compared to the negative. If your customers find satisfaction in your fintech application, they’re not only inclined to continue using your product but may also enthusiastically recommend it to their acquaintances. However, consider the scenario where a customer’s data is compromised. In such cases, the consequences are twofold: not only do you lose the trust of your existing client, but you also deter potential users.
While integrating fintech security measures may entail an investment of time and resources, the process of regaining lost trust demands a great deal of effort.
These represent the primary security risks that people may face when using fintech apps. The fact of the matter is that any system is susceptible to hacking. Yet, the silver lining lies in the scale of the potential losses, encompassing the time and resources required for recovery, which hinge on the strength of your fintech security measures.
Best Practices for Fintech Security
Here is a list of best practices for developing fintech applications, categorizing them by their level of importance. Let’s begin with the critical ones.
Backup on a Regular Basis
Data loss isn’t always the result of external threats; it can stem from human errors or hardware failures. Establishing a backup routine for critical data helps prevent its complete loss. Regularly backing up important files, including edited and altered information, ensures that valuable data is preserved.
Encrypting Data Storage
Implementing data encryption stands as a fundamental security practice, serving as a shield against unauthorized access to your data. Through encryption, fintech app developers can safeguard data on storage devices, ensuring it remains impenetrable to prying eyes.
Establishing a Solitary Gateway
Michael Zetser, an expert in the fintech field thinks that similar to the security measures in physical banks, it’s crucial to establish a solitary “gateway” for accessing internal resources, one that can be closely controlled and monitored. Detecting any unauthorized entry should prompt immediate action – closing off the entry point – to thwart fraudulent attempts from gaining access to sensitive files.
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