DECEMBER 12, 2021
9 min read
The concept of security has never shared so many touchpoints with reality than today. Fraud, scams, and data breaches continue to flood the news websites as the industry evolves. In particular, fintech is one of the most vulnerable IT sectors that frequently falls victim to hackers. In Q1 of 2021, financial institutions headed the list of online industries most affected by phishing, accounting for almost 25% of global attacks. Since the inception of the COVID-19 pandemic, the number of fraudulent actions and related risks has significantly increased.
But what can be done to minimise the odds of cybercrime within the fintech industry? Whereas users put in peril only their personal data, entrepreneurs standing behind large organisations risk the safety of hundreds, thousands, and even millions of accounts. There’s at least one technology that can lend fintech players a hand in protecting the sensitive information of their customers. Here’s when two-factor authentication joins the game of cybersecurity. Nowadays it’s a must-have feature to ensure the safety of your software product. Since passwordless logins aren’t ubiquitous, two-factor authentication remains the best solution.
So, what’s meant by 2FA or MFA? In simple terms, these constitute authentication methods that include different security levels a person needs to undergo before entering an app or platform. Therefore, prior to being granted access, a user has to pass various forms of identification. For example, an app may require users to enter a password as well as demonstrate biometrics like face or fingerprint. Today there’s an abundance of services with two-factor authentication offering comprehensive cybersecurity for platforms and their users. Already longing for tips on how to leverage the MFA system and incorporate it into your own software product? Take your seats, fasten belts, and get ready for a quick journey into the world of cybersecurity!
Types of Multi-Factor Authentication
Authentication has already become a buzzword for anyone owning a smartphone, right? But what does ‘multi-factor’ imply? The most secure web or smartphone applications that contain valuable information usually feature 2FA to quickly and safely allow access to user accounts. However, sometimes two layers aren’t enough to repel phishing, malware, or other forms of cyberthreat. That’s why there are 3 types of multi-factor authentication for developers and product owners to make sure their app users can safely store sensitive information on private servers without being compromised.
As a rule, when you log in to a website or app, you’ll be asked to provide a username and password. Still, it proves insufficient on platforms with an in-build 2FA. Most likely, an app will also send you a randomly generated time-sensitive code via SMS or email to verify identity. The fintech industry has recently experienced a boom in 2FA providers for applications. These can certainly relieve your pain as you consider options on how to protect customers from cyberattacks. But more on than later. Now let’s get into the 3 types of MFA! They include knowledge, possession, and inherence.
Knowledge — Something You Know
As the most fundamental type among all two-factor authentication options, knowledge encompasses PINs, code words, passwords, combinations, etc. You’ve probably already guessed that this type of MFA is the most widespread. Nevertheless, for large fintech projects, like a banking or P2P payment app, this factor alone can’t fan hackers away from the precious data. Relying on something your customers know and recall at times proves ineffective when it comes to storing as well as operating petabytes of data that can quickly metamorphose into real money.
Possession — Something You Have
As evident from the title, this type of authentication involves using physical items in your possession to verify authenticity. These objects can be smart cards, keys, USB drives, or token devices that generate random time-based PINs for you to access an app or platform. For instance, you may avail yourself of this verification type to let your customers pass bank authentication procedures more successfully and with fewer odds of a data breach. Isn’t it a miracle?
Inherence — Something You Are
Finally, the 3rd authentication type allows you to verify the identity of your customers via their own body parts. But stop, don’t go ahead and ask them to provide their limbs whenever they need to access your app! Most often, this authentication system presupposes palm scanning, use of fingerprints, facial recognition, voice verification, and so forth. In the 21st century, any reputable piece of fintech software, be it a banking or personal finance management app, must employ MFA. Almost any modern smartphone supports fingerprint or facial recognition methods of authentication, so it’s essential to get the most out of this technology!
2-Factor Authentication Set-Up Process for Your Fintech Product
As you learn more about this technology, you might’ve caught yourself thinking about ways of incorporating 2FA into your software product. Well, what a coincidence, setting up two-factor authentication is as easy as pie! You’ve got two options here. The first one includes building the 2FA system from scratch by making use of your own workforce or using outstaffing and outsourcing services. The second option is more straightforward, but it’ll require you to rely on a third-party solution provider. To implement two-factor authentication with the help of an already-existing service, you can seek assistance from Authy, Vonage, or any other 2FA vendor.
Without a doubt, end-to-end encryption and tokenization do help protect your customers’ data from fraudulent activities. That said, if an owner’s device or email is compromised, these security solutions won’t guarantee maximum cybersecurity. You’ll definitely require an additional layer of defence in the form of 2FA. Even though all these verification procedures often annoy users, they make up the bulk of security layers in the walls of your digital stronghold.
In 2021, companies located in the US, UK, and Japan began to adopt multiple cybersecurity measures to be able to shield off hacker attacks. According to Statista, 56% of UK-based, 48% of US, and 37% of Japanese organisations implemented 2FA as one of the primary technologies responsible for cybersecurity. Consequently, it’s a matter of time until all fintech companies will address the two-factor authentication setup not to annoy users with multiple identification procedures but to fend off cyberattacks. Will you become one of them?
Best 2FA Solutions for Your App
Vonage is an innovative technological solution that allows you to equip your application with the 2FA and Verify API. In other words, if you prefer a third-party option instead of developing a personal MFA technology from scratch, this service may prove a noteworthy opportunity to grasp. With Vonage, you can quickly and securely validate your customers from different corners of the world without exposing their sensitive information to digital ill-wishers.
This software solution is accessible in more than 200 countries with its patented 2FA system. In addition, in case your app users prefer only specific authentication channels, Vonage continually updates them to include options like identity verification via WhatsApp or other popular messengers. Ultimately, what’s even more astonishing is that you pay exclusively for successful authentications.
Beyond question, passwords are still good. But what about supplying your customers with another layer of security through Infobip? This MFA technology provider employs SMS-based authentication to verify your customers’ identities. In this relation, Infobip works perfectly on any modern mobile phone, covers almost all geographical regions, and doesn’t require specific hardware. Sounds functional? Take a breather and hold on before you learn some new awesome tips prepared by DashDevs to make your product even greater.
What’s next? Infobip offers a wide range of microservices built into their app. Whenever you gain access to it, you can authenticate transactions, reset passwords, and reactivate your account. All these features are possible thanks to one-time passwords (OTPs) sent to your customers’ smartphones. That’s how you receive a PIN code via either a voice message or SMS.
If you’re an experienced IT professional, you’ve probably heard about Authy. It’s a free cross-platform solution that enables you or your app users to leverage the benefits of 2FA. Accordingly, it doesn’t matter whether you develop software for Windows, iOS, Linux, or Mac, inasmuch as Authy functions perfectly on any operating system. Unlike competitors, it offers a cloud backup option, which significantly simplifies many procedures and quickens the process of getting secure tokens. Thus, your customers can always restore all the essential data if something goes wrong.
Due to simplicity, security, and cloud backup, Authy has become more often preferred in the industry than Google Authenticator. Interestingly, the in-built features include:
- Capturing 2FA QR codes from various web resources like Facebook or Amazon;
- Managing, editing, and controlling tokens whenever needed;
- Working offline so that your customers don’t lose Authy with their internet connection;
- Granting access to tokens via any gadget, whether it’s a tablet or PC.
Fintech Security Challenges for an App/Platform
Did you know that the expenses of the cybersecurity industry hit $40bn in 2019? Moreover, according to forecasts, the global market size for information security is going to surge up to $175bn by 2024! Today there are numerous forms of fintech security, 2FA being one of the most practical. Yet, what challenges related to cyberattacks do entrepreneurs have to consider before releasing or improving their software product? Below you’ll find the list of most frequent security threats you might have to encounter while operating in the fintech industry. And 2FA may help deal with most of them.
- Malware attacks. Being heavily dependent on SWIFT, any fintech app becomes an easier target for hackers because the system is exposed to flaws and breaches. Consider upgrading your antivirus programs and embedding new security patches.
- App breaches. Since you’re a member of the fintech community, you’re likely to store sensitive information inside your application. That’s why you require encryption, tokenization, anti-malware software, and MFA to protect your servers as well as channels.
- Identity theft. Unfortunately, there’s no technology that guarantees 100% protection from this threat. Nonetheless, implementing biometric authentication considerably reduces the chance of falling victim to identity thieves. Your customers deserve to feel protected and multiply the feeling of belonging.
- Money laundering. If your organisation doesn’t have multiple layers of security and authentication mechanisms, you’re exposed to cybercrime. Money laundering experts can quickly take advantage of your platform without you even noticing a breach. Think about hiring or consulting a skilled financial advisor.
- Phishing. Ransomware attacks are becoming more common within the fintech domain. Hence, it’s essential that you increase the awareness of your app users, continually update the product, and keep up with the latest cybersecurity trends.
How Can Fintech Consumers Stay Secure with MFA?
Now as you’re informed about multiple ways to improve security for your software product, it’s time for the bottom line. Though MFA isn’t an all-in-one protective solution against any source of cyberthreat, it remains a feature of high priority for large fintech apps. Customers should feel safe any time they manage their financial resources via your app. Since they entrust your brand with their money and banking information, it’s always good to have an extra feature to boast of. In the highly competitive IT market, where almost every fintech app has an in-built 2FA technology, you have to think twice before resolving to disregard this rewarding innovation.
So, Is 2FA the Best Security Feature for Digital Businesses?
No, it’s not the best security feature. At the same time, there’s no alternative option. Despite that 2FA doesn’t provide you with 100% protection, it significantly reduces the odds of facing a cyberattack. Not all hackers are sufficiently tech-savvy or have time to pass through all the layers of security you build around your customers. That’s how you show care and relieve the potential pain felt by almost any large-scale fintech player after another data leak.
Now unfasten your belt and exhale freely. The time has come to contact DashDevs and never hesitate. This manifestation of opportunism may save you time and effort as you’ll receive quality assistance in any fintech undertaking!