How Fintech Companies Are Dealing with New Data Security Challenges?
Tags: fintech, ditialpayment, securityfintech
Published: 2020-10-09 07:30:05

Lockdown and social distancing norms forced global businesses to stop their operations. However, FinTech businesses are flourishing during the times of the COVID-19 pandemic. As per <a href="https://www.statista.com/statistics/1116563/fintech-apps-growth-usage-covid19/">statista</a>, the usage of FinTech apps has increased by 55 percent (approx.) in Japan. However, this hike has created a lot of challenges for FinTech businesses. Cybersecurity is one such challenge for FinTech companies. 

The cybersecurity concerns are becoming serious as FinTech companies are unable to provide a <a href="https://www.digipay.guru/digipay-top-notch-application-security/">foolproof platform for digital transactions</a>. The issues of hacking have also increased in digital payment systems.  As per <a href="https://www.securitymagazine.com/articles/87787-hackers-attack-every-39-seconds">security magazine</a>, the hackers attack in every 39 seconds. 

That is why FinTech businesses need to use secure digital payment solutions for preventing hacking and fraud in their digital payment methods. 

FinTech companies are also facing data leaks in their transactions. As the data breaches continue to be a constant security threat, fintech startups are implementing innovative approaches to strengthen their data security.

![Fintech Security Challenges](https://dev-to-uploads.s3.amazonaws.com/i/2ilug3m5fpf3y63hrwkz.jpg)

<h2>6 ways in which FinTech companies are addressing the data security issues</h2>

FinTech companies handle confidential data of businesses and individuals daily. While the easy accessibility of this data helps the FinTech companies to take accurate business decisions, it also brings several cybersecurity challenges for them. 

However, fintech companies have become aware of these challenges now and they are effectively tackling these issues. Let us see how FinTech companies are solving their security issues:

<h3>Effective prevention of data breaches</h3>

The data breach is a massive risk for any FinTech company as it may compromise the sensitive information of the customers. With the rise in the usage of FinTech app solutions, fintech enterprises are handling humongous data. Sometimes it happens that these companies can face an issue in storing their customer’s data.

Nowadays, companies are using device-oriented cryptograms to ensure that the payment has been generated only through the user's device. If the data has been hacked somehow, these cryptograms will cancel the transaction.

FinTech companies are also using AI fuzzing to find loopholes in their software. AI Fuzzing uses machine learning mechanisms to identify potential threats in an app’s codebase before hackers can find them.

<h3>Managing Cloud security risks</h3>

Many FinTech corporations are using cloud computing in building payment gateways, digital wallets, mobile apps, and websites. Cloud computing provides them several benefits like scalability, security, and speed.

The integration of inefficient and cheap cloud solutions can be very expensive for banks and financial institutions. Thus, the company needs to go for a trusted cloud solution developer, who can offer secure and customized cloud solutions. 

<h3>Third-party risk management</h3>

Fintech businesses not only use their applications but also use third-party services. Third-party access is the easiest way for hackers to access all the information by masking themselves as a genuine user.

Integration of third-party components like payment gateways, analytics systems, social media buttons, chatbots can compromise the security of the Fintech companies. 

The FinTech businesses can <a href="https://www.peerbits.com/blog/complete-guide-on-hire-remote-developers.html">hire remote developers</a> to decrease the number of third-party components or they can restructure these components from scratch. 

<h3>Tackling the identity challenges</h3>

Banks and financial institutions are widely using digital identities to provide a great omnichannel experience to their customers. For providing digital identities, they are empowering their mobile apps with fingerprint scanners, OTPs, and other code generation strategies for secure user authentication. 

Although these methods are more secure than the traditional ones, the management of these digital identities can be tough for FinTech businesses.

If these identities have stolen, the hackers can easily access the confidential data of the users and steal a massive amount of money from their bank accounts. Thus, Fintech businesses are advised to use a patented data backup equipped with modern technologies like Artificial Intelligence and Machine Learning.

<h3>Solving AI security issues</h3>

FinTechs are daily processing a large amount of data like investment data, net worth, balance sheets, cash flows, credit and debit card data, and the demographic information of the customers. Processing and analyzing such unique and humongous data needs a lot of effort. This overloading of data can also create serious AI security problems for the company.

FinTech companies can decrease human input in their systems and also they can integrate an automatic system that can be automatically switched off when AI tools begin to produce wrong outputs.

Also, they can take help of their software development team to understand the complex structure of artificial intelligence.

<h3>Protection from malware attacks</h3>

Malware attacks and hacking are the most prominent threats that have faced by FinTech companies. Hackers are now effortlessly hacking SWIFT that has been faced by many banks. 

Banks and Fintech startups can partner with a managed security service provider (MSSP). They can also hire software developers to perform Red Team assessments. Red Team assessments will test the program’s capabilities against malware attack and help the businesses to fill the gaps in their current strategy.

<h2>Summing Up</h2>

Global FinTech companies are using new technologies to defend against adaptive and creative hackers. Perhaps this struggle will lead to even safer cyberspace than ever before - but whatever may happen, it seems the investment in a secure Digital payment solution has now become a necessity for the FinTech firms.

I hope you find this blog useful. Keep reading this space for more such insights.