Fintech is changing the way most people go about their business across India. According to America’s CNBC, 52% of Indians are adopting fintech, peeping out every other country but China. The knock-on effect of this is huge investment. Businesses can’t wait to get their foot in the Indian fintech market, and that’s represented by investments of 2.9 lakh crore, according to PwC.
However, with change happening at such a breakneck pace, fintech has been hit with headlines over the past year as expanding technology faces security threats. Inherent risks with the cloud, upon which much modern fintech is based, is tied to classic finance security risks. The good news? Developers are more than aware and huge strides are being made to secure your data.
The current challenge faced by fintech
Credit lending takes up a big chunk of the Indian fintech innovation cycle. Many young professionals have historically struggled to secure loans for startup business and housing due to the stringent credit checks required to obtain conventional sources of funding. Ever disruptive to institutional lenders, fintech has deployed AI to form ‘live’ credit scores and issue funds via online, cloud-based banking.
Whilst encryption standards are up to par, this of course bypasses some of the checks that banks rely on; like face-to-face recognition and address checking. According to the Times, fintech are employing ultra-secure and speedy blockchain technology to guarantee account assurance and overall cybersecurity. What’s more, these methods are being increasingly picked up – or outsourced – by banks, nodding to a longer trend.
Emerging threats and counters
Data ubiquity, the process by which data is shared seamlessly between devices, users, services and businesses, is part of fintech’s core appeal. Making life easier via crafty apps is made possible by allowing your personal data to be shared. According to PwC India, managing digital identities is a key challenge for fintech companies going forward. Previously, a vast range of passwords, PINs and other identifiers were used by consumers; now, fintech integration with services like Google SmartLock encourage an eggs-in-one-basket approach, for ease. Despite inherent security features in these services and security authenticators, it remains that one breach can affect the rest.
Fintech companies are countering this with smart but targeted improvements. According to Spanish bank BBVA, fintech companies are increasingly working with bank APIs to ensure that customer data is used responsibly and to enhance security. Furthermore, with fintech startups often using blockchain, highlighted above, it’s likely more companies will begin to adopt transformative effect to guarantee data quality and assurance.
Overall, fintech companies are doing a lot to preserve customer integrity in an era where data is becoming more open and available. Challenges will always be posed as risk elements find ways to create them. Hand-in-hand with big institutions as well as disruptive companies, fintech development is staying on top of the game.