Best Practices for Securing Your Fintech Management
Building a secure Fintech app? We reveal key steps to safeguard data and build user confidence.
By 2025, the fintech industry is projected to reach a worldwide market value of $305 billion, according to Market Data Forecast.1 With rapid innovation and growth at every corner, the fintech industry is in desperate need of fintech management solutions to help protect the security of its customers.
This article will explain what fintech companies are, outline their significance in the modern digital services market, and help you understand the best fintech management solutions available to protect the integrity of your product
What Is a Fintech Company and What Types Are There?
“Fintech” is a portmanteau combining the term “financial services” with the word “technology”. A financial technology company, or fintech company, is a type of company that may take the form of software, service, or a business that provides technological avenues for making financial processes easier and more efficient for any business, while also providing an alternative to traditional banking.
Fintech companies and alternative financing companies stand apart in the realm of all technology companies because they, above others in neighboring markets, tend to take an extremely customer-centric approach to their functionality.
Though fintech companies have challenged traditional banking and given it more to compete with, fintech companies haven’t completely disrupted the banking market. Instead, it’s shown traditional banking firms how to adjust to advancing market needs.
Fintech didn’t spring out of nowhere. Instead, it’s likely to have sprung from three developments from the 1990s: the internet, cell phones, and cloud-based software.
Fintechs’ industry categories/fintech management categories may include:
- Mobile banking & payment services.
- Cryptocurrency.
- Blockchain.
- Lending.
- Payments.
- Robo-advising.
- International money transfers.
- Equity financing.
- Stock-trading.
- Consumer banking.
- Insurance.
- Budgeting.
Fintech companies have positioned themselves at the forefront of banking market needs and respond in real-time to the wants and needs of consumers. According to the Massachusetts Institute of Technology, moving forward, fintech “will be defined by data and access.” They continue, mentioning that “Machine learning will deliver more specific insights from ever bigger datasets, while ubiquitous mobility “allows for instant access to the consumer, and for consumers, instant access to their own data.” Further, MIT also mentions that concerns regarding environmental policies will increasingly become part of successful fintech equations.3
Challenges Fintech Companies Face
Fintech companies, though groundbreaking and positively disruptive, possess their own set of challenges and obstacles to overcome.
First, for example, many fintech companies fail to inspire trust in users and provide low levels of transparency. Some fintechs have also suffered security breaches, or are at risk for security breaches.2
Fintech companies also face expanding marketplaces and sometimes struggle to keep up with rapidly-evolving technological advancement.
Last, fintechs must also abide by market-wide policies and regulations.
How to Secure Your Fintech Application
According to Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship, fintech must master four areas in order for them to succeed.3
- Entrepreneurship
- Technology
- Domain knowledge
- Policy and regulation
Secure fintech apps are also integral to the success of your company. Building a secure fintech can be challenging, but with the right tools and knowledge, software developers and financial institutions can create an incredible fintech product that encourages confidence and trustworthiness. Software engineers and developers can, however, take certain measures to protect customers’ sensitive data.
- Require authentication authorization and ensure that security measures, such as identification, are taken.
- Invest in creating a secure mobile data encryption policy. A high-quality mobile data encryption policy with encryption algorithms will not only make your fintech app feel safe, but help each and every one of your customers feel confident in trusting your application with their personal data.
- Test your application through routine security testing. To protect customers’ data and proactively approach any potential security issues, perform routine security.
Further, owners of financial technology companies may wish to do the following:
- Establish infrastructure security.
To establish infrastructure security, you may wish to have experts conduct IT audits and assessments on your product. By doing this, you’ll be able to assess and address any weakness in your product’s infrastructure.
- Establish secure application logic.
When designing a fintech application, be sure to write secure code to protect the integrity of your application. The Open Web Application Security Project (OWASP) is a non-profit that works to establish the best universal coding practices. In 2018, they published their Top ten Proactive Controls list, which included a variety of security requirements integral to safe, secure coding. The first of this list is to define security practices, followed by leveraging security frameworks and libraries, securing database access, and more.4
- Ensure API and web server security.
Web Application Programming Interfaces (APIs) help applications communicate with each other. To ensure you protect your data security, utilize aforementioned security measures (such as sound business logic, symmetric encryption, and security testing) to protect the integrity and privacy of this communication.
- Initiative a payment blocking feature.
You can initiate and customize a payment blocking feature to help protect the security of your application.
How to Improve Fintech Communication
Strategic fintech communication can build your brand reputation and grow your business. To improve your fintech communication, be sure to invest in high-quality public relations and marketing plans. As a part of these plans, you may wish to make social media pages for your fintech company that are on-brand across various channels of communication.
By creating a distinguishable brand and carrying this reputation across various channels, you will be able to grow your audience, obtain leads, and scale your business.
What Are the Areas and Sectors in Which Fintech Is Active?
The main areas and sectors in which fintech is active include:
- Mobile banking.
- Big data and predictive models.
- Compliance.
- Crowdfunding.
- Cryptocurrencies and alternative currencies.
- Foreign exchange market.
- Automated process management and digitization.
- Risk management.
- Payments and transfers.
- P2P lending.
- Insurance.
- Security and privacy.
- Financial advisory services.
- Trading.
Moving forward, Fintech companies will position themselves at the forefront of banking market needs and respond in real-time to the wants and needs of consumers. According to the Massachusetts Institute of Technology, moving forward, fintech “will be defined by data and access.” They continue, mentioning that “Machine learning will deliver more specific insights from ever bigger datasets, while ubiquitous mobility “allows for instant access to the consumer, and for consumers, instant access to their own data.” Further, MIT also mentions that concerns regarding environmental policies will increasingly become part of successful fintech equations.3
Frequently Asked Questions
FAQ: What Financial Challenges Does Fintech solve?
Fintech companies have improved many aspects of finance and filled many gaps in customer needs. By paying attention to the direct needs of their target audiences, fintech companies have solved a variety of issues. For example, fintech companies have improved the ability for users to lend money, process payments, deposit checks (without stepping into a brick and mortar bank), obtain loans, attain insurance, and more.
FAQ: What Is Fintech and How Does it Work?
If you are looking to improve your user experience and grow your fintech application or product, contact WANDR studios. We can help you build a secure fintech application that can meet and satisfy all of your design goals.
