The pandemic caused a 35% growth in the usage of fintech apps in the U.S. alone. But this exponential growth has caused some growing pains. Start-ups don’t always have adequate human and capital resources to match the growth. Apps created on the fly by bigger legacy banks may be rushed to market before proper security testing can be completed.
Meanwhile, cybercriminals have taken note and earmarked fintech apps as potential targets. Read on to learn some of the biggest security threats Fintech companies are likely to face. We'll also share some tips on how to mitigate the risks.
The cross-platform malware infection
Fintech firms rely on different digital platforms to power their business. For instance, these firms can source cloud services and web essentials from distinct vendors. This makes it easier for hackers to develop malware to attack their systems. Cybercriminals will target and infect a vendor who has weak cybersecurity protocols. This malware can propagate itself from the source platform to other platforms.
Fintech companies need to reduce the reliance on multiple vendors to counter the threat. The firms should go for vendors who offer a one-stop solution to their needs. This could mean going for vendors who can protect, back-up, and recover the data from remote locations instantly. The vendor should be able to offer updated technology to integrate with a variety of platforms. Technology that is safe boosts the user confidence among clients.
Trouble with management of digital identities
Fintech firms are growing at a faster rate and this comes with great responsibility. These companies need to find ways of collecting and storing ever-increasing digital identities. Digital identities are important because they enhance an omnichannel experience for the clients. When the data is huge, cloning and managing them becomes difficult. It doesn’t help that most fintech start-ups have inadequate capital and human resources for this task.
Biometric sensors can help with managing digital sensors. Sensors such as fingerprint scanners will enable Fintech companies to authenticate and give access to rightful clients. One-time passwords (OTPs) are also great ways of authenticating correct users in mobile apps. OTPs and biometric sensors are more secure than traditional security forms like PINs.
Poor app design
Some app designs have an insufficient implementation of SSL and TLS. TLS and SLS are important in encrypting the connection between computers and servers. Additionally, developers sometimes use poor quality codes. These factors make it easier for cybercriminals to infiltrate the system. They do this through acts such as phishing which can lead to direct losses to the consumers. Hackers may also take advantage of the weak protocols to advance a ransomware attack.
Fintech companies can adopt multi factor authentication procedures. The procedures add an extra layer of security to protect users from becoming victims of phishing. Mobile app shielding will harden the app at the source code level to increase its security. Moreover, all Fintech start-ups should comply with the Gramm-Leach-Bliley Act (GLBA) to protect their systems.
Fintech firms are gaining a foothold in the business space. These firms, especially the start-ups, need to upgrade their resources to accommodate the growth. Otherwise, they risk becoming soft-targets for cybercriminals. The upgrade can be as simple as improving the coding process for their apps. Fintech firms need to protect their customers by relying on modern software such as biometrics for digital identities management. Using products from a single vendor will reduce the chances of cross-malware infection.
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