Confidence and digital security in the Fintech platform

The financial technology or Fintech market is expanding with new and innovative businesses that improve banking and financial services like never before. According to the Market Data ForecastBy 2026, the fintech market will reach a market value of $324 billion at a compound annual growth rate of 23.41%.

As the industry continues to grow steadily, fraudsters are also evolving at the same speed, making it difficult for financial institutions to implement the best tools and protect their businesses and customers.

Confidence and digital security in the Fintech platform

Because financial institutions don’t implement the tools quickly, customers remain skeptical.

As reported in the May 2021 BIS survey, US households say they trust traditional banking institutions more than fintech to protect their data. Therefore, it becomes essential for the FinTech industry to bridge the trust gap and protect people’s data.

Trust: the undeniable asset of FinTech

Thinking of Fintech, technologies such as Big data, digital identification and open banking are the first things that come to mind. These tools facilitate new opportunities for digital transformation in the financial sector. But getting people to try products built on these fintech innovations requires their trust.

Furthermore, the trust gap can occur at any level of the digital banking ecosystem, that is, between users and platform, platform and sectors, or sectors and technology providers. However, from the statistics mentioned above, it is clear that consumers trust traditional banking more than fintech institutions, so it is essential to approach fintech solutions holistically.

Designing your Fintech solution

Before designing a solution for your Fintech business, you need to understand if the user experience you offer resonates with people on a rational and emotional level. If the fintech product you provide is significant, the way you ensure credibility and functionality, added by your technology partner, will be a sign of trust.

In order to fuse trust in Fintech products, each stage of product development, such as user experience, critical feature development, business analysis, etc., must have a trustworthy foundation.

Risks in Fintech for Consumers

There are many dangers for customers in the fintech industry. These dangers can be broadly divided into compromised data security and the use of data that is not transparent to both regulators and consumers.

The loss of privacy, the increased risk of fraud and fraud, the discriminatory uses of data analysis and the manipulation of consumer behavior are undeniable.

These situations risk entering the financial regulatory space with minimal operational knowledge.

Fintech Development Trends You Should Know

One of the significant risks for consumers will be the loss of privacy and data security.

Loss of privacy and data security are intertwined and raise different concerns depending on the data being accessed and how sensitive the information is.

Banks are already at risk of data breaches due to siled IT systems.

The growth of these activities created the “Crime as a Service” phase that built the SaaS-based playoff technology.

Speaking of risks in Fintech, in addition to cyber insecurity, some vulnerable consumers have also faced risks of fraud and scams. And the rate of online scams and fraud is increasing day by day and creating fake online identities; These days, fake IDs are much easier to do online than creating your own real-life identity.

So what are the ways to earn consumer trust while providing security on fintech platforms? Let’s find out.

Ways to achieve trust and security in the Fintech platform

Despite being the focus of cybercriminals, the fintech industry has been strongly opposed. With the help of new tools and technologies, Fintech organizations are working to create trustworthy foundations for their customers and enjoy security on the platform.

Artificial intelligence or AI is a broad branch of information technology that aims to build intelligent machines to perform tasks that generally require human intelligence.

For example, in the Fintech industry, AI collects data, analyzes information, secures and facilitates transactions.

The comprehensive purpose of AI uses includes customer service, credit risk assessment, decision making, and most importantly, fraud detection.

Blockchain in the supply chain: a transparent perspective for products

AI and ML systems analyze business and customer data to help the Fintech industry identify vulnerabilities and classify customer risks.

As AI can analyze a large volume of transactions, it can be used to reject or flag transactions entirely for further investigation. Additionally, an ML model can be used to predict behavior at a granular level across all aspects of a transaction to predict any fraudulent activity.

That’s why FinTech leaders like Visa are moving toward artificial intelligence and machine learning strategies to prevent and control financial fraud.

Not prioritizing cybersecurity within the fintech space can create critical risks. To build more robust cybersecurity, Fintech organizations must be aware of their assets and implement a layered security strategy so that if one protocol fails, it does not affect other protocols.

To achieve this, cloud solutions, multifactor authentications, and identity and access management (IAM) can be leveraged.

Blockchain is a digitally decentralized and distributed ledger that exists on a network. It is a series of immutable blocks. Blockchain distributes transactions through different blocks or nodes that cannot be modified.

Any unauthorized access will change the hash links and create a mismatch between the nodes, making the Blockchain highly secure. Blockchain protects the data of a fintech organization and offers them an additional bonus.

The decentralized nature of blockchain networks eliminates costly and unnecessary workflows and processes. It goes without saying that Blockchain can restrict data breaches or any other fraudulent activities to reduce fraud and cyber attacks on fintech services.

Regtech or Regulatory Technology helps financial institutions to meet regulatory requirements effectively. It relies on AI and ML to automate routine tasks like fraud and risk management, regulatory reformulation, real-time reporting, data analysis, and decision making.

This technology aims to ensure that Fintech remains compliant with regulations. Regtech works by automating regulatory changes, monitoring transactions, generating reports, and alerting compliance staff about potentially fraudulent transactions.

Some of the critical features of RegTech are speed, agility, integration, and analytics.

Secure Access Service Edge (SASE) is a network architecture that turns SD-WAN into a cloud service. In a nutshell, SASE combines the benefits of Software Defined Wide Area Networks (SD-WAN) with the security to offer it as a facility.

For fintech organizations, SASE simplifies authentication, increases scalability, supports zero-trust networking, security convergence, and simplified administration.

In short, using SASE in the fintech industry can increase the security of your cloud-based infrastructure application and prevent unauthorized access or abuse of sensitive customer data.

Another important factor when developing fintech applications is testing throughout the development cycle.

To test the security of the application, you will need to create a security testing team that can generate realistic scenarios of data breaches or other scams and improve the security of the application.

The fintech security testing team will also conduct penetration tests to detect potential vulnerabilities and conduct a security audit to detect flaws, verify the effectiveness of security measures, and assess regulatory compliance.

What is the role of smart contracts in the banking industry?

final thoughts

Fintech can be made more secure by keeping an eye on the circumstances that drive its adoption, freeing itself from outdated security transactions that don’t fit its current direction, and taking a new approach to data security by being transparent.

If we learn the right lessons, trade, trust and the digital economy will be even more resilient and reliable.

Analyzing user behavior to defeat Fintech fraud or similar platforms becomes essential for service in a saturated market. Therefore, it must be established in the most transparent way possible for the knowledge and consideration of the clients.

The challenges of a Fintech industrialist

To overcome the challenges of Fintech industrialists, you can use security trends like Machine Learning and AI for faster fraud detection. Also, use Blockchain to keep data transparent yet secure.

Don’t forget about IoT for smarter cybersecurity to develop safe and reliable Fintech products and solutions.

Only after integrating these technologies for security will the Fintech industry show its true potential in the market and gain the trust of its customers.

mahipal nehra

Digital Marketing Expert

Work with Decipher Zone which is a Java development company. He always loves to write about technical knowledge, tools for data analysis, emerging technology trends, AI-powered transportation services, robots, web applications, CRM, and digital transformation IT solutions.

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