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Picture a landscape where all your financial transactions are done in a blink of an eye, investments are managed with a swipe, loans are approved with a tap, and where financial technology is transforming the way we manage money. Welcome to the world of fintech!
With new platforms and applications developed every day, the fintech (financial technology) industry has grown exponentially over the past few decades. Statista reveals, as of May 2023, there were nearly 11,651 fintech startups in the US (the highest in the world), followed by 5,061 in the Asia Pacific and 9,681 in the EMEA (Europe, the Middle East, and Africa).
With the rapid growth of fintech companies, the number of mobile banking users is also increasing at an unprecedented rate. According to Statista, the number of digital banking users in the US is projected to reach 217 million by 2025, from 197 million in 2021. With the ease and convenience mobile banking offers to users, this number may go even beyond the estimation.
With the unprecedented escalated number of users embracing the digital financial revolution, there exists a pressing need to bolster fintech cybersecurity.
Data breaches and cyber-attacks are frequently in the news as hackers are constantly active in tampering with vulnerable data and breaching security protocols. A successful attempt by such hackers can not only cost millions of dollars to companies but also tarnish their overall brand reputation and credibility in the market.
For instance, Equifax, an American multinational consumer credit reporting company, faced one of the biggest data breaches of the century, which cost them nearly $4 billion in just a few days. The loss far outweighed the cost of putting strong security measures in place. It has proven to be true, as two years after the breach, the company spent around $1.4 billion on cleanup costs, which included improving app and data security costs and transforming IT infrastructure costs. Conversely, a secure fintech app development costs only $50,000 to $200,000 (more details later).
Here are some other examples of fintech cyber attacks reported in 2022:
So, what are your security protocols to stay safe from such incidents and not fall prey to any malicious cyber attacks? What are your best practices to make a highly secure and compliant financial platform for your customers?
Well, with the swift growth in mobile banking users, building a custom fintech app with strong security measures can be your ultimate rescue against such threats. Let’s dive in to understand how to build a secure financial application in 2023.
There has never been a greater way to ensure cybersecurity in the fintech industry than building a custom mobile application with strong security measures.
According to Statista, 43.5% of US consumers prefer using mobile banking to access accounts, making it the most prevalent banking method. However, building a secure fintech application is a complex and time-consuming task that requires relevant experience, expertise, and awareness of fintech security compliances such as PCI-DSS and GDPR.
While the steps to build a fintech app are similar to any other mobile app development, understanding the fintech cybersecurity best practices is crucial to ensure the ongoing success of your fintech application. Thus, here is a step-by-step guide on how to build a secure fintech app:
The first step to fintech app development starts with defining the purpose of your fintech app. Figure out what type of fintech app will best serve your needs. Would you require a solution for mobile banking, peer-to-peer lending, investment management, loan sanction, or any other financial service? Gaining a clear understanding of your app’s purpose will help you build the right type of app that will cater to the needs of your target audience.
Now, based on your product’s purpose, outline the core features and functionalities of your fintech app. No matter what specific purpose your app serves, you must consider adding the basic security features like user authentication, secure transactions, account management, personalized notifications, real-time data updates, and analytics; and build a roadmap for development.
An intuitive interface is the lifeblood of any application, and a fintech app is no exception. So, build an easy-to-navigate and visually appealing interface that guides users through various functions. Pay attention to convenience, accessibility, security, and transaction flows to ensure a seamless UI/UX design.
Now, it is time to begin with the development process. Use the right tech stack and follow agile methodologies to develop a cutting-edge, secure, and robust fintech application. Once developed, conduct thorough testing to identify and resolve any bugs or glitches before launching it to the market.
Your fintech app development process does not end at its successful deployment. You need to constantly monitor your app’s performance, feedback, user engagement, scalability, and security to ensure its ongoing success in the fintech industry. You can use analytics tools to gain insights into user behavior and stay up-to-date with the security standards to iterate and enhance the app’s performance based on market trends and user feedback.
The cost of developing a secure financial app varies depending on several factors, such as the platform(s) the app will be created for, the type of app, the app’s features and complexity, the level of security it provides, and the location of the fintech app development company.
Each of these factors significantly contributes to the overall app development cost. Therefore, it is challenging to provide an exact cost of fintech app development without knowing your specific requirements. To give a rough estimate, fintech app development cost can range somewhere from $50,000 to $300,000 or more, depending on the factors mentioned above.
Now that you know the basic steps to build a secure fintech app and its associated costs, let’s discover the best practices to keep your application safe from cybercrime and gain a competitive advantage.
With the ever-increasing risk of data breaches and cybercrime, the importance of integrating proactive security measures into fintech applications has become higher than ever. A small incident of a security breach in a fintech app can result in major financial losses, legal implications, and reputational damage. So, you must incorporate the best practices when building a fintech app security solution.
The fintech industry is highly regulated. Therefore, to protect users’ data and ensure cybersecurity, you need to familiarize yourself with the regulatory standards. Ensure your app adheres to general regulations such as Anti-Money Laundering (AML), Know Your Customer (KYC), PCI-DSS, and General Data Protection Regulation (GDPR) to build trust and compliance.
Building a secure fintech solution means integrating security at every stage of the application. Therefore, when building a fintech cybersecurity app, you need to ensure what data to store, where to store it, who will access your app, and more. Try to keep your app’s architecture simple and store only the minimal crucial data so that hackers can’t steal sensitive information from your system. For instance, build a secure payment gateway that does not ask for the customers’ card numbers. Regularly testing the data restoration process is also essential to ensure data integrity.
Secure coding is the backbone of a fintech application. If your code has even the smallest vulnerabilities, your entire effort of building a secure application may go in vain, bringing your business at risk. Therefore, the tech experts who deploy the code should consider proper logging, input validation, password management, handling of errors, authentication, cryptography practices, and secured communication.
The success of the fintech industry heavily relies on the security and scalability of financial solutions. Therefore, when building a fintech app, integrate strong security measures such as biometric identification, two-factor authentication, data encryption, and secure APIs.
Biometric Identification: The biometric technology adds an extra layer of security to the application by allowing users to access the fintech solution only with their unique biometric data, such as facial recognition or fingerprints.
Multi-Factor Authentication: Multi-factor authentication asks users to provide two or more forms of identification to access the application. For instance, users need to use a password and an OTP sent to their mobile device before accessing their accounts.
Data Encryption: Data encryption is one of the best practices to secure financial information. Add a strong data encryption feature to protect sensitive user data at rest and during transmission, ensuring that hackers can’t gain unauthorized access and interpret the information.
Application Programming Interfaces (APIs): Fintech app security solutions interact with various third-party services through APIs. Therefore, your fintech cybersecurity strategies must include the security of these APIs to prevent dubious access and potential data breaches.
By integrating these cybersecurity solutions and security features into the fintech applications, businesses can successfully face the fintech cybersecurity risks while building a secure and resilient digital financial ecosystem.
Building a secure fintech app is a nerve-wracking ordeal. Your in-house team might face a tough time following the above-listed steps and best practices successfully. So, to ensure easy and successful app development, you can consider partnering with a trusted fintech app development company that has essential certifications and robust cybersecurity standards to build secure fintech apps. Even if finding the right tech partner is a challenging chore, once you find it, it will pay you off in the long run.
You can follow the below practices to find the right tech partner:
Now that we have talked about all the essential elements that can ensure fintech cybersecurity, it’s time to look at a few examples of financial applications that are ruling the industry with their top-notch security features.
The fintech industry has many different types of applications, each with its unique features and functionalities catering to the diverse needs of users. Here are some real-world applications that demonstrate the best examples of cybersecurity in fintech with their seamless performance and user experience
PayPal is a globally recognized P2P payment app helping users make online purchases, send and receive money, and manage their finances. Thai fintech solution allows users to link their credit cards, debit cards, and bank accounts with the application to facilitate safe and smooth transactions. The widespread acceptance and user-friendly interface of PayPal offer convenient and safe payment solutions for both individuals and businesses, ensuring secure transactions and peace of mind.
Robinhood is a leading stock trading application in the fintech industry that provides users with a secure platform to buy and sell stocks, cryptocurrencies, and ETFs. With two-Factor Authentication (2FA), device monitoring, and other security features, Robinhood is considered a safe option for investors’ securities and cash for various reasons, resulting in the platform acquiring more than 12.2 million monthly active users. Also, Robinhood is a member of the Securities Investor Protection Corp. (SIPC) and also has FDIC insurance, which ensures robust cybersecurity in fintech.
Mint is a comprehensive personal finance app that allows users to track their expenses and finance efficiently. It seamlessly syncs with users’ credit cards, debit cards, bank accounts, and bills to offer personalized insights, helping customers make informed financial decisions. The app’s intuitive interface, robust security measures, and best practices of leveraging IoT, AI, blockchain, and other fintech cybersecurity trends, make it a secure solution for its millions of users worldwide, helping them stay on top of their finances.
In today’s technology-driven age, where handling finances online has become the first preference of tech-savvy individuals, building secure fintech apps should be the prime concern of fintech companies. However, with fintech cybersecurity making news frequently, developing fintech security solutions is not an easy feat. Navigating the complexities of cybersecurity requires the expertise and proficiency of a reliable fintech app development company like Appinventiv.
With a team of 350+ fintech professionals, we have a proven track record of delivering more than 500 custom fintech solutions globally. Our seasoned industry experts can build high-grade and secure fintech apps from scratch based on your needs.
For instance, we built a chatbot-based fintech app, Mudra, that revolutionized budget management for millennials. Since it is a budget management app, it had to process financial data. Therefore, we leveraged AI to its maximum potential and adhered to fintech cybersecurity best practices to integrate cybersecurity at every phase of the project’s life cycle.
For another client, Bajaj Finserv, we created a secure and resilient digital platform, helping them secure 300+ merchant onboarding and 3+ lakh transactions per day. While building this digital platform, we used advanced security practices and walls to prevent financial fraud and secure sensitive information.
With our efficient team of fintech experts, you can confidently embark on your fintech cybersecurity journey and bring your app idea to life. Interested in building a secure and robust fintech app? Contact us now.
Q. What is cybersecurity in fintech?
A. Cybersecurity in fintech means integrating robust security measures and best practices into fintech security solutions to protect users’ sensitive data and finance from unauthorized access, data breaches, and cyber threats. It involves the use of advanced technologies such as artificial intelligence, big data, blockchain, etc., to ensure data protection.
Q. Why is cybersecurity crucial in fintech?
A. Fintech cybersecurity is crucial to ensure the security of users’ information, financial data, and transactions in the digital landscape. It aims to prevent cyber criminals and hackers from gaining unauthorized access to your fintech system and executing their malicious attempts to tamper with your digital infrastructure.
Consult with an IT consulting services provider to learn more about the best cybersecurity strategies.
Q. What are common cybersecurity threats in fintech?
A. Some common cybersecurity threats that you must be aware of are:
Q. What are the benefits of cybersecurity in fintech?
A. Cybersecurity in fintech offers a wide range of benefits against evolving cyber threats. It helps protect users’ sensitive data and financial records from being hacked, stolen, or breached by potential cyber-attacks. By preventing cybercrime, it helps avoid financial losses, regulatory penalties, and reputational damages.