Cybercriminals have long targeted banks, credit unions, and lending institutions, so it’s no surprise that financial services apps are an enticing target for malicious actors.
With the growth of mobile banking, security risks are also increasing. If you’re not addressing application security in financial services apps, here are five reasons why you should start now.
Application Security in Financial Applications
Some recent studies have shown that less than 50% of finance applications were found to have the appropriate level of security. This is extremely concerning as hundreds of millions of people all around the world use mobile banking and finance applications.
The importance of mobile application security can never be overstated. The mobile channel provides a rich attack surface for malicious attackers and a fertile ground for social engineering attacks. Smartphones often have access to personal data, such as email addresses, phone numbers, locations, contacts, and more. What’s more, smartphones are also equipped with cameras that could capture sensitive financial data like credit card numbers or signatures.
The vulnerabilities inherent to the mobile environment are not just restricted to individuals who use their device for banking purposes; the smartphone itself is vulnerable to cyberattacks from people nearby with just enough information to glean from a quick glance at the device (e.g., using your phone’s browser).
As the world becomes more and more mobile, the usage of apps is increasing exponentially, especially in the financial services industry. Banks and credit card companies are introducing new applications to provide their customers with 24/7 access to their accounts. As more and more financial service apps are being developed, it’s important that banks pay attention to security issues as well as performance issues in order to ensure the safety of their consumers’ information.
Further, below are 5 reasons why your application security heavily impacts the banking and finance industry as well as users of such applications.
1) Mobile Applications: An attractive target
Financial services apps are one of the highest targeted applications by cybercriminals. This is because the users of these apps have more access to sensitive information than ever before and many of them store their banking credentials on their devices. This makes it easier for hackers to steal information from victims’ devices and use it for nefarious purposes. Since financial apps often hold a significant amount of personal information, criminals see them as a gold mine waiting to be plundered. They then target financial app developers with spear phishing emails containing links that lead victims to malicious websites, or they attack the back-end servers themselves.
2) Information stored by Financial Firms is valuable
The information stored by financial firms is valuable to malicious actors and can be used for various purposes including data theft, account takeovers, and fraud.
Financial firms are aware of this risk and are taking steps to mitigate the damages that a cyberattack could cause. For example, many organizations have replaced old encryption systems with newer technology as well as staff members with people who have cybersecurity experience. As mobile banking adoption continues to grow, it will become even more important for these types of apps to implement strong security features.
3) The Banking Industry is highly regulated
Banking and financial services are highly regulated. This means that financial institutions must not only follow industry regulations, but they must also ensure that their software complies with laws, such as the Gramm-Leach-Bliley Act (GLBA) and Payment Card Industry Data Security Standard (PCI DSS). Failing to adhere to these standards can result in fines and penalties. Security-baked applications are likely to be the future of financial applications that not only comply with the latest financial laws and regulations but also provide their users with a safe digital banking experience.
4) Mobile Applications facilitate greater Customer Engagement
The most important reason for application security in the financial services industry has to do with customer engagement. When an organization provides a mobile banking or payments app, it has the opportunity to engage customers and encourage them to make transactions on their phones. The more engaged customers are with an organization’s products, the better they feel about that company.
5) Mobile Banking frauds on the increase
It’s not surprising that mobile banking fraud is on the rise. 90% of consumers worry about digital bank fraud while mobile banking fraud accounted for 59.7% of the digital banking crime incidents reported to Sabric in 2020. With financial services apps becoming more commonplace and consumers carrying out more transactions through their smartphones, it’s inevitable that there will be an uptick in security breaches as attackers get wise to how customers bank with apps. Therefore, securing your financial apps should be one of your highest priorities to survive and thrive in today’s connected world.
Application security has become even more important with the rise of mobile banking. Customers are using their mobile devices to manage their finances, and as such, these devices have become a new target for malicious actors.
This means that application security on the backend has become even more important as an extra layer of protection. App Shielding, Monitoring, Detection and Response (XDR) for the Financial Industry has become one of Build38’s priorities. Especially with hundreds of different platforms used by financial services organizations and the recent emergence of chatbots, it’s crucial to prioritize secure development practices across all platforms to ensure that customer information and data remain safe.