The global financial technology market is driven by the exponential growth of e-commerce, the increasing popularity of digital payments and mobile banking apps, and even the implications of the COVID-19 pandemic. It is predicted to grow at a CAGR of 8.6% from 2021 to 2024.
It makes the FinTech market highly attractive for startups, yet they are the least equipped to deal with FinTech security challenges because they often lack the human and capital resources. In the meantime, the average cost of a financial services data breach is $5.85 million.
The good news is that companies can follow FinTech security best practices to prevent breaches. One such practice is the encryption of sensitive data.
FinTech app owners need to protect both data at rest and in transition. Thus, it is recommended to encrypt sensitive data. Encryption involves mathematical algorithms that convert data into code understandable only to the intended receiver. Hackers won’t be able to decipher it without the decryption key. So, even if they hack the data, they won’t be able to access it.
There are various algorithms that of encryption exist, and here are ones that are the most tested and time-proved within the industry:
- AES (Advanced Encryption Standard). What is AES? AES encryption extends support to both hardware and software and is resistant to cryptanalytic attacks.
- TripleDES (Triple Data Encryption Standard). What is triple encryption about? This algorithm divides data into 64-bit blocks and ciphers each data block three times.
- RSA assigns different keys for the encryption and decoding process.
- Twofish is an open-source algorithm that encrypts data into 128-bit blocks through 16 rounds of data encryption.
For modern FinTech solutions, it is recommended to embrace the “compliance-as-code” approach. It means integrating audits and compliance with regulations like PCI DSS and GDPR directly into their DevOps processes. Thus, they translate security controls into code and templates and break the silos between the information security, development, and operations teams.
As you can see, security is a major issue for FinTech apps and their development. In our recent material 10 Best Practices to Promote Fintech Security, you can find more information on FinTech security challenges and tips to build a secure FinTech app.