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Over the past few years of the expanding digital landscape, there have been many fears of people losing their personal security, especially their data. With many of our operations already automated and digital, is it possible that using apps can put us in jeopardy, especially when it comes to our finances?
Despite what many people think, app security is not often at the top of a business’ list of priorities, This is because many organizations tend to be pressured by the growing competition to release different software at quick intervals and regular periods so as not to get left behind, which comes at the expense of developing proper security. About 92% of web applications have security flaws or weaknesses, with 70% of websites belonging to companies on the Financial Times (FT) 500 list accessible through the dark web. These can then be easily and improperly accessed as the apps usually don’t have access control measures such as authentication processes.
In 2017 alone, there were 19,954 detected vulnerabilities in 1,865 applications coming from about 259 vendors. In 2016, the number was 17,147, which means there was a 14% increase in detections. Compared to five years ago, the increase is about 38%. So, despite the fact that technology has progressed so far, security still remains a largely unsolved problem in the world of applications. And even when companies do try to patch web applications to cover up vulnerabilities, the average number of days this takes place is 38, as stated by Tech Beacon.
While to some this may not be all that alarming, it has severe implications when you consider that several apps today are banking or digital wallet apps. Financial technology industries have long fought to push the era of commerce and banking into the digital domain in the form of e-wallets and online payment systems, and many people use those today to do their shopping, bill payments, and other transactions.
Fintech has proved itself to be an efficient system that can help provide faster and more seamless customer experience and more efficient payments between two parties. One especially commendable achievement of fintech is that it has managed to help solve the financial woes of countries and communities that have informal economies, according to Business Media MAGS, and people who are unbanked and unable to afford the rates in regular banks.
However, if you consider digital security risks, things start to look more dangerous for fintech industries, especially those that make use of mobile or web apps to perform business. With the shoddy reputation of apps, how are you sure that your data can be kept safe?
With the way that online banking so often works in conjunction with money-transfer technology, customers must have enough trust in the service to hand them a lot of vital information, such as usernames, passwords, and even card numbers for their accounts.
This is a recipe for disaster, as unfortunately there are several fintech providers that skim over double-checking their security mechanisms as many rely on blockchain to provide protection for them since it’s meant to provide automatic protection. However, there are many other levels of operation into which hackers could easily infiltrate. Besides, even Bitcoin accounts and Blockchain ledgers can be hacked or experience a security breach even when it was thought that the encrypted nature of the tech would keep it safe. Thus, additional protection algorithms should be put in place, as stated by Medium.com.
Another possible source of a security flaw in fintech is that systems can make senders and receivers completely anonymous, especially in peer-to-peer transactions. This means that a simple hack could bring money to criminals such as fictitious companies or drug lords.
In order to deal with these problems, fintech startup companies should identify digital security risks early on in their development in order to deal with the problems as quickly as possible, instead of shirking them for later. Multi-layered software protection should be incorporated by companies.
Aside from this raising awareness of digital security breaches, especially in our banking and wallet apps, can help us become more choosey about which businesses to select and patronize. Once other businesses determine that customers are looking for more security in their banking options, they will be forced to act toward those goals.
With operations as large as fintech projected to be in the next few years, it's imperative and unfortunately necessary that more regulations be set up, especially with government intervention, such as the setup of additional data limits and creating more distributed ledgers. The European Union is already working to polish the Payment Services Directive (PSD2) which will help encourage fintech competition while also ensuring user security. Under this program, the banks will be forced to give third parties access to users’ accounts through secure programming interfaces.
Hopefully, fintech companies, both new and old, will turn a listening ear to the security woes of their clients and begin to properly remedy these problems.
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