App Development: Security Lessons Taken From the Fintech Industry

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Fintech is a vulnerable industry. It holds endless amounts of delicate personal information, among which passwords and ID data are the most important ones and represent the key that opens the door to our financial property.

Should this refrain you from investing in the fintech app development project you had in mind? Absolutely not. 

Almost 50% of people are exclusively using digital channels for their financial needs, which is probably why investment in fintech has never been higher - in 2020 alone, fintech companies acquired $25.6 billion in investments. 

Nevertheless, fintech is still considered a relatively young term and while it was welcomed with open arms due to its countless benefits, the industry quickly became a fertile ground for malicious hackers who were on the hunt for valuable user data. 

In fact, two-thirds of IT professionals believe that it is only a matter of time when a successful attack will occur. This, of course, leaves the rest of the world wondering whether to try out some of the fintech solutions that are at their disposal or to stick to the old, proven ways. 

But what the biggest skeptics among us keep forgetting is that those same IT professionals are working tirelessly on discovering new app development methods that would allow them to build safe digital environments. 

However, as fintech is not the only field that is at risk, the findings are recorded and shared with other developers to be implemented across all digital products. Breaches and identity thefts occur in other industries as well and we can safely assume that no software is safe; not as long as it collects personal data that can be used to gain access to your financial and other assets. 

Identity theft, data breaches, malware attacks, and security vulnerabilities currently pose as some of the greatest threats in the fintech landscape. 

What developers intend to do about it? 

Encrypt data

After certain pieces of information are encoded, a special key is necessary to access it and decipher it into a readable format. Fintech companies resort to a range of encryption algorithms, and app developers, too, rely on them to build their products.

The most commonly used algorithms include: 

  • Advanced Encryption Standard (AES)
  • Rivest-Shamir-Adleman (RSA)
  • Triple Data Encryption Standard (TripleDES);
  • Twofish

Enable tokenization

An additional layer of encryption cannot hurt, which is why the majority of fintech solutions decide to introduce tokens in place of sensitive data and thus minimize the amount of personal information that is being stored in the system. 

Each token a user creates is temporary and expires after it is used to prevent anyone from tracking data through transactions. To decrypt information, you would require unique databases, also known as token vaults - and even those can be encrypted for maximum security. 

Improve password protection options

Yes, thinking of a unique password is great, but have you ever had a safety net? Some of the most common Plan Bs developers go for include:

  • Password expiration - Define a limited period within which a single password can be used and enforce users to change them on a regular basis to reduce the chances of data leaks. 
  • One-Time Password (OTP) system - Instead of choosing and memorizing one password during the profile creation process, using a dynamic PIN will add one more layer of protection since a new password will be generated for every session.  
  • 2-Factor (2F) authentication - In addition to a password, a one-time generated code received via email or SMS will enable users to authenticate in just a couple of clicks. 

Rely less on third-party services

With each third-party system that you introduce, you create an entrance through which hackers can potentially pass and access the fintech product you built. 

An alternative, more secure approach requires you to create the component on your own, which is not a viable solution when the complexity exceeds your level of expertise. In such cases, it really is best to opt for a reliable third-party application.

To know whether to place their trust in a third-party platform, app development teams pay close attention to:

  • Built-in security network
  • Security compliance certifications 
  • Disaster recovery plans
  • Encryption practices
  • Which data the app will gain access to

Write secure code

To build a solid backend architecture, the technology stack has to be carefully chosen to make the application reliable, secure and scalable. 

Code obfuscation is another practice to resort to when you wish to prevent hackers from gaining insight into your code and algorithms. They will be unable to reverse engineer the software and create a fairly authentic copy of the product you created for the sole purpose of data collection. Obfuscation also prevents hackers from bypassing a license, discovering a vulnerability in the code, or stealing a trade secret. 

Implement data deletion mechanisms

The question of data ownership comes into play when your users delete the app or cancel their subscription. To avoid facing compliance issues, a proper data deletion process has to be set to ensure the removal of previous users’ personal information. 

Comply with local regulatory requirements

With growing concern over what happens to user info after it is collected by software, one by one, all regions started to work on perfecting data privacy laws. These are intended to regulate methods of collection, storage, and access to personal information, and those who fail to comply should prepare to face serious legal consequences.

For application developers, this means educating themselves on different privacy acts to ensure their digital product is built in line with local regulations. 

Build permission structure

The introduction of varying access levels will address the issues regarding internal security. App developers have two options at their disposal:

  • RBAC - With a Role-Based Access control in place, an application can restrict individual users’ access to certain options and information based on their defined role. 
  • ACL - Access Control List which can include a list of all users’ operations and responsibilities, in that way allowing them to obtain data relevant and necessary to their work. 

Evade the use of legacy systems

While there are still those who believe that the old are the proven ways, relying on a legacy system doesn’t always leave you with enough room to scale. Regular updates, as well, are critical for overall application performance, along with periodic code refactoring that ensures the system is clean and doesn’t contain parts of software that are no longer in use or working. 

The latest Fintech trends that will be incorporated across a variety of industries

Machine Learning & Artificial Intelligence

AI and ML technologies aid in the further advancement of fintech products’ performance and security. Because in this case, the two have to go hand in hand. 

Namely, as Artificial Intelligence and Machine Learning improve speed and convenience in terms of how certain services are delivered, these benefits leave more room for hackers to infiltrate the system and access users’ personal information. Fortunately, these technologies utilize more intelligent data analytics tools for fraud detection, including Pattern Recognition, KDD, Data Mining, Statistics, Neural Networks, etc. 

Machine learning can also be employed for access control. For instance, by relying on previous behavioral patterns (eg. the most common login times and user’s geolocation), it is possible to send alerts of potential breach attempts. 


A large number of fintech solutions opt for biometric authentication as the ultimate security method. As early as 2016, Evans Data Survey showed that mobile app developers’ most preferable method of security is biometrics. The uniqueness of a person’s fingerprint, iris, or voice not only lowers the chances of a breach but also heightens user experience. As it becomes the person’s primary and often only necessary identifier, it hastens the authentication process and helps connect the data across a range of touchpoints. 

For fintech solutions, this form of authentication is already a default option and is starting to gain traction in other areas of app development, as well. 

Bottom line

After COVID, we expect to see a further, more accelerated rise in the number of fintech application users. Even the not-so-tech-savvy are turning to digital alternatives and are calling for more applications that will answer their needs and simplify some of the financial management processes.

At Inviggo, our development teams continue to learn from fintech experience and apply the knowledge they gather to all applications and software that we build to include payments and financial transactions. We place the largest focus on system authorization to ensure adequate protection before the platform becomes operational. We also go about data collection and storage carefully, to make certain that only the most necessary information is kept, while the rest is replaced with tokens or secured using some other proven encryption methods.

Of course, we take a personalized approach to every project. How we will go about building your app to include a secure payment system will depend on a number of factors and your individual requirements.

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