Cybersecurity Best Practices for Financial Technology

It is imperative to adopt robust cybersecurity measures to protect banks and their customers. This article will examine some of the best practices that can help banking institutions stay safe and secure in Cyberage.

Secure Infrastructure

Establishing a secure infrastructure is an essential component of fintech security. Companies must take measures to ensure that APIs, cloud servers, and software remain up to date with the latest security patches. Multi-factor authentication serves as an additional safeguard against unauthorized access to sensitive data. Implemented responsibly, such measures can guarantee a greater level of security for fintech applications. To achieve this, regular updates and patches must be deployed, and authentication augmented with appropriate measures. Fintech firms can mitigate the risk of unauthorized access and protect their most sensitive data by taking such measures.

For example, to ensure a secure infrastructure, a leading mobile payments company deploys secure APIs accessible exclusively through robust OAuth2 authentication and consistently upgrades its cloud servers with the most recent security patches. Moreover, biometrics, such as fingerprint scanning, are incorporated into their multi-factor authentication strategy to reinforce security even further.

Secure Coding Practices

Fintech companies should employ secure coding practices to ensure their products are built securely by employing robust encryption to safeguard vulnerable data, enforcing access controls to restrict any unnecessary access, and rigorously testing the product to detect and mend any vulnerabilities. Furthermore, these teams should frequently audit their security, identifying and resolving any security risks. Thus, with stringent coding measures, teams can establish a safe and secure environment for their customers.

For example, an online banking service takes every measure to ensure the security and safety of its customers’ data. The service guarantees that customer data is safeguarded and secure by implementing stringent access controls, encrypting sensitive information, regularly conducting third-party security audits, and conducting thorough tests to identify potential vulnerabilities. Moreover, customer confidence and trust are achieved through these rigorous coding practices.

Employee Training

Employees of fintech companies must receive comprehensive training to cultivate a strong security culture. They must stay informed on the latest security threats, guard against being deceived by phishing emails, and create secure passwords and use multi-factor authentication. Furthermore, staff must be familiarized with the relevant procedures and protocols to follow in case of a security incident, such as promptly alerting the authorities. It is thus essential that training involves increased complexity and variety, ranging from simple to complex explanations.

For example, to ensure that all employees are well-versed in cybersecurity, a prominent fintech startup regularly conducts workshops and training on recognizing and avoiding phishing attacks. These exercises are structured to simulate real-life scenarios and provide valuable feedback. To protect the company from potential security breaches, the startup has a concise protocol that all personnel must abide by if they spot any suspicious activities.

Vendor Due Diligence

Regarding vendor due diligence, fintech organizations should exercise particular caution since it is crucial to safeguarding their assets and ensuring that their vendors maintain high-security standards. To authenticate and confirm the vendor’s security certifications, security policies, and processes must be carefully examined, and audits must be conducted regularly. Long-term verification that the vendor satisfies the business’s security requirements also depends on ongoing monitoring. To maintain company continuity in the case of any security breaches, quick response and corrective action should be implemented as soon as feasible.

For example, imagine an extensive vendor assessment procedure is present in a peer-to-peer lending platform. They regularly examine their vendors’ security certifications, policies, and practices. They protect company data and systems by ensuring that their providers follow the strictest security guidelines.

Data Encryption

In the field of finance, data encryption is essential to cybersecurity. Encryption should be used by fintech businesses to safeguard sensitive data both in transit and at rest. This includes encrypting data that is sent between servers and clients as well as data that is kept on servers. In order to preserve the encryption keys, fintech organizations need also to develop secure key management procedures.

For instance, a company that provides digital wallets encrypts all sensitive user data with the AES-256 standard, both in transit and at rest. This implies that all payment information supplied by users to their servers is encrypted, as is all data maintained on those servers.

Multi-Factor Authentication

Multi-factor authentication is a powerful tool to safeguard fintech systems from malicious intrusions. Companies offering fintech services should make it obligatory for all users – be it employees or customers – to adopt multi-factor authentication. This requires the combination of something familiar, like passwords, and something tangible, such as tokens or biometric readers. To ensure secure access to the system and maximum protection, using such measures is highly recommended.

Regular Backups

For fintech systems to rapidly bounce back from security incidents, periodic backups are important. All data kept on systems by fintech companies should be periodically backed up, and backups must be maintained in a safe place. Furthermore, in order to make sure their recovery and backup procedures are accurate, financial technology firms must review them regularly.

Compliance with Regulations

Financial technology businesses are required to maintain high standards of data privacy and security, in full compliance with laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). To ensure that all regulations are followed accurately and completely, such businesses must regularly carry out audit checks. Additionally, they must pay attention to the complexities and brevity of their written policies and documents. This is done to ensure that all documentation is reliable and accurate, with sufficient detail for understanding, while being succinct, easy to comprehend, and accessible.

For example, “For many organizations, monitoring end-user access to sensitive information, as well as the movement of this data is an essential part of their cybersecurity program. Before the ubiquity of cloud platforms and hybrid work, this was done with an on-premises data loss prevention tool.”

Conclusion

With increasing prosperity in the financial technology sect, comes the need for stronger security measures. To protect their users against potential online risks, businesses must implement measures ranging from secure coding approaches, periodic security audits, multi-factor authentication, and role-based access control for virtual assets. These measures are necessary to ensure the lasting prosperity of financial tech businesses. Fintech companies can protect their systems and customers from cyber threats by following these best practices.

About the Author: Prasanna Peshkar is a cybersecurity researcher, educator, and cybersecurity technical content writer. He is interested in performing audits by assessing web application threats, and vulnerabilities. He is interested in new attack methodologies, tools and frameworks. He also spends time looking for new vulnerabilities, and understanding emerging cybersecurity threats in the blockchain technology. He is also a regular writer at Bora.