The Role of Data Security and Privacy in Fintech Software Development for B2B Transactions

Fintech is a specific industry that manages clients’ money and collects and stores plenty of personal information. That is why bank resources are such a tasty morsel for criminals, and their theft causes an avalanche of negative consequences, including loss of customer trust.

Fintech security standards must rely on multifaceted and modern solutions. Any software produced for the needs of the financial industry should rely only on verified products that effectively resist cyberattacks. At the same time, banking apps should think for their users to minimize the human factor facilitating the theft of money from an account.

The fintech services have a different format than barely a few years ago. The development of many comfortable fintech applications reduced the need to visit traditional banks to a minimum. Moreover, with the evolution of digital transactions in banking, payments are faster and more efficient. Bank IT systems ensure transparency and instant detection of suspicious transactions on a company account.

The digitization of banking services has opened many companies to doing business abroad. Fintech services that care about the safety of their customers and offer them favorable transaction conditions have made the flow of money between companies located in different parts of the world as convenient and straightforward as ever before.

Financial organizations are the most popular target for cybercriminals since the automation and digitization of most banking services. With the development of the fintech industry, hackers who meticulously look for vulnerabilities in the software are constantly training. They also figure out scenarios to extort sensitive data and large sums of money using social engineering.

One of the biggest fintech security challenges is the development of custom financial software services that allow you to settle many matters anywhere in the world while having security equal to the best Swiss vaults. In addition, the entire fintech app design should be adapted to the legal regulations that are in force in each country where the software users come from.

For many years you have been building your company’s brand and reputation. A group of loyal customers and the trust they give you are the driving force of your business. When using fintech applications, you must take care of your customers and their financial data security.

In the event of a cyberattack, thieves gain access to information that they can use to extort large sums of money and put all your customers in debt. Even if the actions of criminals are thwarted, affected customers will lose trust in your company, leaving with the revenue they have generated so far.

Are you wondering how to stay a step ahead the cybercriminals? In order not to find out about an attack on your customers’ resources after the fact, you must pay close attention to the continuous monitoring of the security of your infrastructure. Invaluable in detecting criminal activity are tools based on Machine Learning and Artificial Intelligence.

A significant weakness of any system is the human factor. Therefore, the best fintech security solutions should protect resources against theft or security breaches using authentication means. If you want to minimize the possibility of user error, remember to have biometric authentication, multi-factor authentication, and strict password policies.

Despite cybercriminals lurking at every step, building a secure fintech infrastructure is possible. Check which elements you should pay particular attention to so that customers using your fintech applications feel safe.

There is no secure mobile fintech application without data encryption. If you are looking for a software development company to build secure fintech solutions, consider whether they mention data encryption at the design stage. When the data is encrypted, special encryption keys must be used to read it. Thanks to this, in case of a data breach, they are useless to cybercriminals who can’t interpret the data encrypted by the algorithm.

Role-based access control means different users get the access level they need to perform their duties. That minimizes situations related to the deliberate confidential data breach outside the organization or accidental access by unauthorized persons.

Intrusion Detection Systems analyze network traffic to detect and defeat cyberattacks in real time. The main elements of the IDS system are a probe analyzing network traffic, a database collecting information from the probe, and a log analyzer. IDS systems analyze data streams, identifying packets that indicate cybercriminal activity.

As mentioned earlier, the methods of authorizing and authenticating users minimize the impact of human weakness in contact with technology. They also stop cybercriminals who go to great lengths to extort fintech app login credentials from users. The more sophisticated levels of identity authentication, the easier it is to prevent unauthorized users from logging in.

User Authentication helps you identify the people who want to access your data. What means of authentication will work best for conducting business transactions? The basis is to set a login and password, but you should not stop there. Use multi-factor authentication, in which, in addition to the password, you will use biometrics, a one-time code, certificate, or token.

Authorization grants access to specific resources to a verified user. The authorization process is carried out only after successful user authentication. The authorization methods include the aforementioned role-based access control and sister methods that grant access to resources based on specific attributes.

Do you notice the padlock icon in the address bar each time you log in to online banking? If not, start checking it out. The padlock icon informs users that critical data entered on this website will be encrypted during transmission to the server. The TLS protocol (commonly SSL) is responsible for encryption. Having this protection in fintech apps is crucial for the security of customer data. If you notice the lack of this icon in the address bar, you are probably on a fake website created by cybercriminals to extort your data.

When designing a fintech solution, in addition to the rules regarding the acquisition and storage of data, you should know the law regarding their removal or retention. The General Data Protection Regulation says you should keep your customer data until you no longer need it. There are only a few specific cases where you can’t delete the collected information. Plus, the storage location of the sensitive data should be clearly defined and made available to the relevant authorities upon request.

How can you store data to make it difficult for unauthorized persons or organizations to access them? In specific cases, it will work to divide the data into many parts, encrypt them and store them separately. If one or more datasets are stored with a third-party storage provider, you are responsible for the safeguards verification. Even if you cooperate with a company having the best security solutions, its employees can still access your data.

When designing a fintech app, you should first focus on security issues. During the software development cycle, you should constantly check whether the solutions you have implemented have not been hacked and make changes to the project if necessary.

DevSecOps is a methodology that helps you create a secure fintech solution. The DevSecOps approach makes cybersecurity an integral part of the DevOps pipeline, next to architecture design, coding, and software testing. The benefits of DevSecOps are fast releases, cost reduction, rapid error detection, and increased security.

As a part of the DevSecOps pipeline, testing is essential for fintech business applications. To be sure your product will meet the expectation of your customers and have the weakness points reduced to a minimum, you should invest in a professional security testing team. The professionals will perform rigorous procedures, e.g., penetration testing, and will help you include an information security management system with security protocols in your application.

Security risks will exist, and data breaches will happen. Most importantly, you should always be aware that an unpleasant situation can happen to you too. To minimize the effects of a problem when a hacker gains access to your data, you should prepare a procedure to follow. It is best to prepare it during developing the application so it is ready when it is available to users.

When you deal with the effects of cyber threats, the last thing you should do is panic. Slate which employees are responsible for handling the situation, what steps the company should take while a threat is identified, and how communication with affected customers will look. Try to act transparently and methodically, and you will minimize the risk of losing the trust of customers and contractors.

When working on custom solutions for the fintech industry, you must not forget that, except for being incredibly secure, your new fintech app should also be convenient and user-friendly. Carry out tests to check whether logging into the system is not too complicated and whether access to crucial information is intuitive. For data protection, you cannot discourage future users of the application who expect to perform planned actions in a few simple steps.

Fintech security compliance is the basis of building a trust-based business relationship. Every step of all the transactions between the contractors is transparent, and electronic identification of the other company is as easy as ever. When you care about providing secure fintech products, you show your customers and counterparties that your business is reliable.

Do you plan to implement top financial technology solutions in your company? Contact Scalo and let us help you implement a secure fintech platform that will open your business to new possibilities of markets worldwide.