The financial sector has always been aversive to change. Yet, the FinTech space has gone through a period of serious acceleration achieving large-scale public adoption and scalability.
The benefits of going digital are abundantly clear. In fact, embracing technology has resulted in significant cost savings, improved efficiency, enhanced customer experiences, and more.
For example, according to the World FinTech Report, automating time-consuming tasks helped a major British bank achieve an 80% return on investment within just six months. In this scenario, what took humans approximately half an hour to complete was reduced to only 10 minutes.
As investment continues to pour in, established financial institutions are disrupting themselves while new startups are mushrooming all over the world. Experts predict that FinTech companies will process $8 trillion in global transactions by 2022.
As financial technology does a better job at identifying fraud, enhancing customer experiences, and building trust, you can expect banks around the world to force their regulators to approve the integration of new technology in their financial operations.
However, to be successful within this space, you have to build highly secure FinTech applications that ensure enhanced privacy, security, and compliance. In fact, nothing will kill a FinTech initiative or a brand faster than a data breach.
So how do you secure your custom FinTech application? Let’s take a look.
Start with the Service Architecture
Developing secure applications starts with service architecture. This is because data privacy and security are paramount to maintaining compliance and brand relevance.
An excellent place to start is by formulating and establishing a detailed privacy and security policy. There are many Software-as-a-Service architectures that businesses can leverage, but when it comes to FinTech, custom development will be critical to building a successful application within a highly regulated space.
Building an app from scratch will also help ensure that all stakeholders get exactly what they wanted. It’s also the best approach to engage in QA testing of every element before and after you launch your digital financial product.
Because of the significant top tech talent shortage, most investment firms, financial institutions, and insurance companies will struggle to put together a capable development team. Whenever this is the case, it’s best to partner with an established FinTech development partner to outsource the project entirely or augment your in-house development team.
Align Data Protection Controls with Regulatory Demands
Security and compliance regulations should be regularly revisited during the development process. But before you start the project, it’s best to ask yourself the following questions:
- Where will my highly sensitive data live?
- What steps should we tale to secure them?
- Who will have access to this information?
Exploring the answers to these questions will ensure that security protocols like firewalls and encryption are in place. It will also make sure that data is encrypted while in motion, in use, and at rest.
For financial applications, it’ll also be a good idea to implement two-factor authentication. This approach will also go a long way to help ensure compliance.
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At the same time, it’ll also be necessary to setup device inventory controls. These should align with industry standards to ensure security whenever a device is lost, stolen, or discarded.
It’s also essential to align yourself with industry partners as success will depend on close partnerships with other financial institutions.
Security Depends on Extensive Testing
Once your product is ready, you will have to shift your focus to testing. This means conducting QA tests and penetrating testing to identify potential weaknesses. This practice should be ongoing to mitigate risk even long after the product has hit the market.
If you have a FinTech development partner, they should be able to handle all aspects of the whole development process and help you effectively manage risk.
However, this begs the question. Since we are dealing with highly sensitive customer information, how would you go about identifying a reliable and trustworthy development partner?
Factors to Consider When Outsourcing Your FinTech Development Project
Access to Tech Talent
These days, there’s a ton of outsourcing companies spread across the planet. To find the best provider that suits your specific needs, you have to look out for certain characteristics.
If we take a FinTech banking app, for example, the company should have artificial intelligence, data and analytics, machine learning, and predictive analytics capabilities.
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As a customer, you make the final hiring decisions
As the industry is highly regulated, the company you work with should also include you in the hiring process. This means that your third-party partner must be willing to give you control over critical aspects of the hiring process.
However, this doesn’t mean that you have to be directly involved through all the recruitment stages. If your FinTech development provider follows a mature recruitment process that meets international standards, you can take a step back and let them handle it.
Partner with a Highly Transparent Provider
In a highly regulated industry, it’s necessary to be transparent across the board. So if you decide to nearshore or offshore your development project, make sure that you partner with a provider who shares the same ethos.
If your outsourcing provider has been accused of unethical behavior, has tax issues, or refuses to comply with your country’s regulatory requirements, you’re asking for trouble. In this scenario, you’ll risk falling foul of the law and losing all your customers.
Your Potential FinTech Development Partner Has a Solid Risk Mitigation Plan
When you engage with various FinTech development providers around the world, it’s also essential to ask them about their risk mitigation plan. This is important because you’re going to be handling sensitive customer data.
If they don’t have a robust risk mitigation plan, then it might be best to move on to the next potential candidate. Remember, you want to get this right from the start to avoid any possible damage to your brand down the road.
And how do you secure your custom-built FinTech applications?