As digital platforms disrupt and dominate markets to create communities of enormous scale, they deliver compelling customer experiences and offer new forms of innovation and value creation. Africa has been a main attraction for Fintech. Yet, most new platform businesses will fail unless players acquire a new mind-set and business approach. One of the critical success factors that help entrepreneurs and incumbent companies achieve successful platform-based businesses is the security of the platform itself.
How to secure your FinTech app
In our discussion of the methods for securing your FinTech application, we will touch upon several aspects of dealing with FinTech app security issues at different stages of app creation and maintenance.
Write a secure code
Your app security begins with the code and the protection mechanisms built into it. While different development frameworks and environments have inherent security measures, there are some common practices that we recommend and use in our daily work:
- Include security policies in your software architecture. This point includes several practical steps, such as implementing a multi-level access management system with the possibility of quick revocation, providing authentication mechanisms, etc.
- Perform input validation. Include a mechanism for validating any data received from other sources, especially untrusted ones.
- Check the data sent to external systems and networks. Send only what is absolutely necessary and verify that the data you are sending does not contain any sensitive information or allow injecting a malicious command.
- Deny by default. Close access to all app functions and allow it only on a need-to-know basis.
- Pay attention to your framework messages. As we have said, most development tools and frameworks include security mechanisms; therefore, they can detect flaws in your code. Note the warnings that your framework sends and alter your code accordingly.
Test your app
Everybody tests their software product – this goes without saying for all development companies. True, there are lots of testing practices and methodologies verifying all aspects of an app. However, to create a fully secure Fintech application, you also need to specifically test it for security.
Security testing is a multi-component task. During the creation of an app, include the following testing stages:
- Network security testing. Verify that the network infrastructure has no vulnerabilities. System software security testing. At this stage, check the operating system, the database, the storages, and other components for flaws and breach possibilities.
- Client-side security testing. Here, check that no breach can occur during the application running in the browser.
- Server-side security testing. Make sure you are using reliable frameworks and tools on the server side and that their security mechanisms are adequate.
Also, use penetration testing to verify the security of your application. Penetration testing is a simulation of an attack on your app to reveal vulnerabilities.
Use data encryption
Encryption is the way to protect data “in transit”, that is, during sending between different entities. When the data is being sent, it is rather easy to snatch. Encryption turns your data into a meaningless scramble that is of no use to hackers. At the same time, the intended recipient will be able to view it in its original form.
There are many encryption algorithms that are used to protect sensitive data. AES (Advanced Encryption Standard) is considered to be the most secure and is now the US federal government standard. Most applications running on Android, iOS, and Windows operating systems use this encryption method. At the same time, proper encryption requires not only the choice of the encryption method, but also its professional implementation.
Implement reliable authentication methods
No FinTech app can be secure without proper authentication. By performing the authentication procedure, the user confirms that they are who they claim to be and have the right to access their financial matters. Each user has their personal account where they can see their statuses and perform operations with their finances. It is up to the app developer to set up the authentication procedure so as to prevent user identity interception and unauthorized access.
In 2018, a simple one-step login-password procedure is not enough for a FinTech application. The recommended way is to use multi-factor authentication, where the user not only provides their login and password, but also verifies their identity via their phone number or email. A unique code sent to an email or phone completes the authentication.
Use payment blocking
If your application supports payments, introduce certain blocking mechanisms that will stop the payment of an unusual amount, of an unusual frequency, or from an unusual place. Many banks use such measures in their applications to prevent money theft from their clients’ accounts.
For example, you may add the geolocation feature to your app to block payments made from a place your client has never visited before. Of course, we do not want to ruin our users’ vacations in exotic places, thus inform them about such a restriction and implement a way to disable blocking if the customer advises you of the places they are planning to visit.
Educate your users
The security measures that you include in your application work only as long as your app users are proactively protecting their data. Therefore, inform your users of the security actions that they should practice. For example, provide clear instructions on what to do if the customer loses their phone – how to block or suspend the account, and how to reactivate it on a new device or phone number.
For FinTech applications, it is important to keep to some basic security principles – never store the login and password in the application, never use the app via unprotected communication channels, such as public Wi-Fi networks, and, especially importantly, never disable the default protection mechanisms implemented by the app provider. When a secure application is used in a secure manner, we may say that the goal has been reached.
Ensure compliance with security regulations and standards
If you are building FinTech software, compliance with certain security regulations may not even be a matter of choice. If you plan to cooperate with major banks or payment systems, such as Visa or MasterCard, you may be explicitly required to comply. Moreover, if you manifest following the generally accepted security standards, it will be a signal to other banks or financial institutions that you are reliable and safe to work with.