Meta Description: FinTech applications and services must be secure to be sustainable and trustworthy for the clients and to comply. Aspects including design, infrastructure, authorization, authentication, and technologies including (PCI-DSS, secrets management, and 3D security) make important components of security and compliance of the FinTech apps and services.
The future and prospects of the FinTech industry and services remain robust despite temporary setbacks such as the COVID-19 pandemic. However, ensuring app/cloud security and compliance are critical issues that modern FinTech businesses and application developers deal with. Following are the best practices for developing and implementing FinTech applications and services. The practices are important to ensure the security, compliance, trustworthiness, and sustainability of FinTeh Applications.
Best Practices for a Secure FinTech Application
Since the new century began, the FinTech industry has experienced exponential growth. It was further supported by wireless payments and online translations. However, compromising with rigorous security methodologies can be an invitation to malicious actors. Below are some tips and the best practices for developing a secure FinTech application.
Security by Design
Strict security protocols and measures should be followed throughout the development of a FinTech application. The development teams should comprise of SecOps and DevOps teams and professionals. It will make the app less costly and ensure its utmost safety. For instance, when security lapses are exposed at a later stage, it may cause a loss of business and an increase in costs. Such losses can be easily prevented by prior planning.
Encryption (End-to-End)
The developers and data custodians must ensure complete protection against issues including data tampering, data leaks, and eavesdropping. It can be ensured by implementing encryption technologies such as TLS (Transport Layer Security). It can ensure complete data protection when the data transits within the corporate and internal networks or during client communications and other external networks. Public keys must also be used for validation and for making the applications and the services trustworthy for the clients. The new security standards including AES (Advanced Encryption Standard) can also protect the data at rest.
The Additional “Secrets” Management Layer
The above measures should also be combined with security measures including “secrets” management. The additional security layer can prevent unauthorized access by securely handling the metadata, passphrases, authentication codes and tokens, and private keys. Some examples of “Secrets” management technologies (for authentication and encryption) include Docker Secrets and the Secrets Manager Technology of AWS.
Authorization and Authentication
Authorization, authentication, and accounting are some of the important pillars of security of any kind of application. Authentication involves using a username and a password. It is called a “single factor” authentication mechanism. With the advancement in technology, we have other more advanced authentication measures available now including sign tokens, public keys, and multi-factor authentication. However, user requests should also be authenticated by measures including RBAC (Rule-Based Access Control). Auditing and accounting mechanisms can issue alerts during a breach and hunt for any threats in a proactive manner.
Secure SaaS (Software-as-a-Service) or Cloud Services
While a FinTech application should be secured by design and implementation, the security of the infrastructure must not be compromised. The leading public cloud service providers including Google and AWS use encryption and security protocols and certifications such as PCI-DSS (Payment Card Industry Data Security Standard). While this is the basics of infrastructure security, there may also be other and further controls in place.
Compliance
Complying with the general and region-specific security regulations is a must for all FinTech service providers. Adopting multiple and elaborate security measures can ensure that you comply with all the regulations including the following:
· Cyber Security Requirements (USA).
· Prudential Regulation Authority Requirements (Australia).
· General Data Protection Regulations (GDPR).
A FinTech business can also reach the market faster if it buys the services of leading cloud vendors who use and deploy security standards and certifications. However, ensure to follow a full due diligence endeavor to evaluate the partners and vendors as it impacts compliance, security, performance, and other critical business aspects.
3-D Security and Tokenization
There are other and additional security protocols and technologies available as well now. One newer measure is the “3D Secure” or 3DS advanced measure of fraud protection. It is now a part of card fraud prevention measures. Another measure is tokenization, which can hash sensitive information (for instance, stored cards and personally identifiable information). Such measures can further strengthen the security of FinTech applications and services.
Features to Prevent Money Laundering
All banking institutions must ensure active prevention of money laundering. It applies to the FinTech industry as well. The program must include features to prevent any money laundering acts at the acquisition point and target itself. Alternatively, checks can be implemented before the fintech platform showcases itself to the public and the consumers. Anit-Money Laundering (AML) is a pertinent issue for FinTech as internationally traded and anonymous digital currencies can be even more prone to money laundering. Regulatory agencies in many countries have already identified the problem. They use unique identifiers to recognize and sort the e-wallets and the e-devices. The fintech industry must also participate in ensuring AML and ensure that the platform is used only for fair purposes. Fortunately, both machine learning and blockchain can identify minuscule anomalies and prevent money laundering. Fintech businesses can avoid legal issues and penalties.
Conclusion
FinTech applications can be secure and compliant with the regulations if they follow the security protocols throughout their design process and are supported by secure cloud vendors and infrastructures. Remember that there may be a “shared responsibility model” for many of the public cloud infrastructure and service providers. The vendors may be responsible for ensuring the safety of the infrastructure, network, data centers, storage, and platforms (physical security). However, the client may be responsible for data security and other aspects of the security of a FinTech application. You need to gain more information about the different security regulations and must be aware of the technologies available to comply with them for a secure fintech application and service.