Since its humble beginnings, Fintech has always strived to compete with traditional financial methods. As a result, it leveraged the use of technology to enhance its financial potential. Today, technology has made money transfers considerably easy — compared to the old days — thanks to mobile phone apps and blockchain. Yet, one thing still plagues the financial sphere — cyber-security.
Unlike banks that constantly go on to improve their core security systems, Fintech apps must rely solely on their verification process to allow users with the right credentials to access their data.
So, are there any ways technology can help make this process more secure and reliable?
Read the article below and find out.
1. Blockchain for Digital Transactions
Although Blockchain was originally designed with cryptocurrencies in mind, the potentials of this incredible technology are seemingly limitless. For one, its decentralized public digital ledger could make a world of difference for Fintechs. In essence, transaction data could be stored safely across multiple computers all across the world without fear of it getting modified or altered in any way due to its consensus mechanics. Apart from efficiently recording transactions between two parties, it could also help share valuable KYC (know-your-client) data without the use of intermediaries of any kind.
Hence, transaction data would not only be safer but faster and more accessible as well.
2. Machine Learning and AI for Fraud Detection
Internet fraud and money laundering are on the rise — and they are getting more sophisticated by the day. According to one report, there were 65% more phishing attacks than the previous year (2017), with no indication of it going down anytime soon.
Now, the thing that could ultimately shield these weaker points in the financial services chain is deep machine learning. In short, the AI effectively utilizes its smart computer systems to learn, predict, and interpret data all on its own, without any additional programming. Meaning, machine learning could greatly reduce the time it takes to review manual queues, false positives, and the account opening and validation process; including payment authorization done in real-time.
3. Multi-Layered Identity Verification
Another important safety issue for Fintechs is the whole authorization and identification process; by law, companies are obliged to verify that people are, in fact, who they claim to be, to prevent potential fraud and identity theft. What’s more, KYC also provides brands with valuable customer insight they can use to improve their customer experience.
For instance, this is where identity biometrics comes in handy. Biometric identification provides a more robust — and streamlined — security measure than, say, two-factor authentication. It also helps establish one’s company as a secure and trustworthy brand; trust is extremely hard to come by these days. To implement such multi-layered identity verifications for your brand contact a trusted provider such as Data Zoo and create custom-tailored solutions for your particular industry.
4. Data Encryption
The transmission of data across participants is one of the biggest concerns of Fintech security. Luckily for us, technology has an answer — encryption. Data needs to be encrypted before it can be transferred, safely. Yet, there’s a growing concern that this technology will somehow affect performance; it will not. Facebook, for instance, uses standard SSL encryption and there are no signs of any performance issues whatsoever. Nevertheless, having HTTPS and SSL is but the start. New encryption technologies — particularly those concerning mobile encryption — are well on their way, making data transmission safer for Fintechs in the very near future.
5. Penetration Testing and Security Assessments
Without any further testing, there can be no progress. That is exactly why penetration testing is so vital for the success of Fintechs. It allows security experts to assess any safety issues that people may come across in the future. Now, by successfully identifying these security concerns before they arise, experts can come up with solutions to keep the product code intact when subjected to an attack.
All in all, it’s better to be safe than sorry.
Whether you’re just a startup or an already established brand, your Fintech security should be your primary concern. Unless, of course, you want fraudsters and money launders to run rampant and ruin your good reputation.