In today’s digital age, cybercriminals continuously target financial apps and platforms to access confidential, sensitive or proprietary data, including user data such as personally identifiable information or “PII” (e.g., name, address, date of birth, social security number, etc.). Companies that develop and make financial apps available through mobile app stores (such as Apple’s App Store or Android’s Google Play) must place a heightened focus on the data security and related safeguarding controls of their financial app, not only because users expect their personal and financial data to be protected, kept and maintained in a safe and secure way so as to prevent the unauthorized access or disclosure of such data, but also because it’s the right thing to do. Users should be able to choose a safe and secure way to invest, so here are five essential security features that a financial app should have, so one may invest with peace of mind:
1 Encryption:
Companies developing a financial app should use encryption to protect user data, both when it is being transmitted and while the data is stored on the app’s servers. End-to-End Encryption (E2EE) helps to ensure that sensitive, proprietary or confidential data, such as account numbers, personal identification information, addresses, passwords, transaction data and Company records, cannot be intercepted or accessed by hackers or unauthorized parties. By encrypting user information, developers can help keep it confidential and safe. Encryption is done by using a cryptographic algorithm to scramble data into an unreadable form. Only authorized users with the correct decryption key can access the information. This helps to ensure that user data is not stolen or compromised. Companies developing fintech or financial apps are increasingly using encryption methods to adequately ensure that the data stored therein, including customer privacy-related data, is protected from security events such as data breaches.
2 Two-Factor Authentication:
Two-Factor authentication (2FA) is an additional layer of security that requires users to provide two forms of identification before logging in to their accounts. This could include something the user knows (like a password) and something the user has – like a fingerprint (Biometric Authentication (e.g., fingerprint or Face ID), access to a specific cell phone or email address linked to the account, or a security token. 2FA can help to prevent unauthorized access to user accounts even if a password is compromised, which makes it a strong recommendation from security professionals. This is a feature that strengthens the overall data security of a financial app and one users should be on the look out for during account onboarding.
3 Security Certifications and Audits:
It is important to consider whether or not a Company’s financial application you are entrusting your hard-earned assets to abides by applicable law and regulation (e.g., GLBA), including industry standards when it comes to data security. One way to review whether or not a Company’s financial app is seeking to adhere to industry standards established by regulatory bodies is to check the website or application’s about page for mentions of compliance with the Payment Card Industry Data Security Standard (PCI DSS). Most companies are proud of their security achievements and will highlight them. Let’s find out more about the “Safeguards Rule” under GLBA and PCI DSS Compliance to better understand what it means for users of a financial app
Financial institutions that make their products and services available through a mobile app are generally subject to the “Safeguards Rule” under the GLBA. At a high level, the Safeguards Rule requires certain financial institutions to develop, implement, and maintain an information security program with administrative, technical and physical safeguards designed to protect customer information. That’s a mouthful, but what does it mean? Simply put, it means that the company or financial institution developing the mobile app must take reasonable steps to: 1) ensure the data security and confidentiality of customer information provided to it; 2) protect against anticipated threats or hazards to the data security or integrity of customer information; and 3) protect against the unauthorized access to that information which could result in substantial harm or inconvenience to a customer of the app.
But it doesn’t end there – PCI DSS is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit and debit card information maintain a secure environment. The Payment Card Industry Security Standards Council (PCI SSC) is tasked with managing and improving the development of security standards throughout the payment transaction process. PCI DSS compliance helps Companies that have developed financial apps with connected debit or credit cards to combat and mitigate the likelihood of fraud in connection with such payments.
These rules, regulations and industry standards noted above are in no way meant to be exhaustive but are some of the more common standards companies developing financial apps adhere to.
4 Activity Monitoring:
A secure financial app should monitor user behavior and activity to detect any unusual or suspicious behavior, such as fraud or identity theft. This could include flagging large transactions, multiple transactions within a short time frame, or multiple logins from different locations, which could indicate unauthorized access and/or fraudulent activity. Monitoring user activity and behavior can help prevent fraud and protect user accounts and information. Companies adhering to prudent and responsible risk management practices typically ensure that they are keeping a watchful eye on your account and assets at all times.
5 Secure Network:
Companies with a financial app should also use a secure network to process, transmit and store user data. This could include using firewalls, intrusion detection and prevention systems, and other security measures to protect against hacking and other cyber threats. Some financial app providers have implemented Network Segmentation, which defines boundaries between network segments where assets within the network group have a common function, risk or role within an organization, this creates a digital safeguard for your information. A secure network is critical to keeping user data safe and secure and should be one of the most important objectives for a financial app.
All in all, a safe and secure financial app should have robust security features that protect, store and maintain user data from unauthorized access by hackers or inadvertent disclosure. Implementing these security features detailed above can serve to build trust and faith in the organization/mobile app developer and with users. Security features are designed to ensure smooth financial operations, while protecting user’s assets. So, remember to keep an eye out for these security features while researching a financial app you want to use for a better investing, saving and payments experience.
