How Safe is it to Use FinTech Applications?
Most of the space in the FinTech industry is occupied by the providers of digital banking and money transfer services. According to a report by the Business Research Company, the global financial services market, which includes banks and payment solution providers, will be worth US$26.5 trillion by 2023.
Meanwhile, the use of mobile banking apps has surpassed that of internet banking platforms across different parts of the world. For example, Forrester found that in Europe, the shares of online adults who frequently do their banking on a smartphone in 2021 were 40%, 54%, and 54% in France, Italy, and the United Kingdom, respectively. In a study published on June 7, 2022, Statista revealed a similar growth in mobile banking in the United States and East Asia. The Statista Research Department wrote thus: “The adoption of online banking has been growing in recent years and is forecast to grow even more. The usage is particularly large in East Asia and Europe, while the figures for the United States are expected to grow steadily as well.”
The rapid growth of the FinTech industry since the COVID-19 pandemic has been a source of excitement and prosperity for millions of people. On the other hand, it causes worry and financial loss for many individuals and businesses due to privacy and cybersecurity challenges. Whatever the case might be for you or your company, it is important to know how to use FinTech apps safely to stay on top of the game. We will guide you through all that you need to know regarding this matter in this article.
Tips on App Security and Privacy
The online security and privacy of your app are not the sole responsibility of your FinTech company. It is also your duty to keep your account information and personal data safe and secure. Hence, we offer you the following tips on how to maintain the privacy and security of your FinTech app as a consumer:
- Use a strong password: The password of your app must not be something easy to guess, like your personal information. Otherwise, without having a hard time, anyone can break into it and steal your money. Therefore, you should create a password that contains numbers, letters in upper and lower cases, and special characters. An example is #ProGRAMing_MyMind+*2022. Please do not use this example because it is already exposed – create your own and let it be known to you alone.
- What type of data does this FinTech company collect from me?
- How is the information stored?
- How long will they keep my data?
- Will my information be shared with third parties?
- Who will take responsibility for data breaches?
- Enable extra security layers: Try to find out the additional security features available on your app. If it has two-factor authentication, enable it. That way, you will need to provide answers to security questions or fulfil one more security check before a transaction is completed in your account. It will help you detect any suspicious activity and prevent it.
- Turn on prompt notification: Almost all FinTech apps come with the option to enable or disable notifications. Without such prompt alerts, you cannot quickly notice that a transaction has been made in your account and verify it. Go to the settings of the app and turn on prompt notifications for transactions and any other changes in your account.
- Log out: Although many FinTech apps automatically log you out of your account after a few minutes of app inactivity, it is your duty to always sign out after using your app. This practice will help prevent someone else from accessing your financial information when you keep your phone aside after using it.
- History is yours to check: Your FinTech company is not responsible for checking your transaction history–it is your duty. If possible, you should check the history of your transactions in your app daily. By doing so, you will be able to notice any strange changes and contact your FinTech company for explanations or rectification.
Suspect a Mistake or Fraud in Your App? Try These Options
If you have mistakenly paid the wrong person or suspect fraudulent activity in your account or anything strange, here are the options you can use to try and fix the situation.
Contact your financial institution
The reasons to contact your financial institution range from a strange change in your app to payment to the wrong person or company. In the first case, you need to call or write to your financial service provider for an explanation of the new development in your account. Hopefully, the new development might be for your good. But if the opposite is the case, you can ask them to reverse the changes where possible or switch to another service provider.
If you made a transfer to the wrong account, quickly contact your bank or neobank, a FinTech company, or credit union about the payment to see how they may be able to reverse the transfer. Provide them with evidence, such as screenshots and other documents, to back up your claim.
Usually, your financial institution will contact the recipient’s bank and try to get back your money. If the mistake is successfully proven, the receiving bank will freeze the account of the recipient to prevent any withdrawals until the mistake is resolved. However, in some cases, you might not be able to get your money back. That is why you should be careful about the details of your transaction before you make the payment.
File a complaint to the relevant bureau
In many countries, there are bureaus for consumers to report financial protection complaints and seek a resolution. So, if you have followed the initial process of contacting your company for help but did not get a satisfactory response, you can file the matter with a financial protection bureau, which is responsible for lawfully forcing companies to respond to customer complaints or face legal action.
Here are examples of consumer protection bureaus you can file a complaint with in Europe, the United Kingdom, and the United States:
- Europe — The European Banking Authority (EBA).
- The United Kingdom — The Financial Conduct Authority, and the Financial Ombudsman Service.
- In the United States — Consumer Financial Protection Bureau (CFPB).
Change your password
Your password is the first thing that should come to your mind when you suspect fraudulent or unauthorised activity in your account. Try to use the current password you know to access your account. If you succeed, quickly change the passwords for the mobile app and desktop site to new ones to block others from accessing your app. Remember always to set up a strong password that is difficult for a human or robot to guess.
But if changing your password was unsuccessful, which would mean that the unauthorised person has created a new one, you should immediately contact your bank or FinTech company to report the situation and seek their help with regaining access to your account. They will verify your ownership of the account and send you a new link to access it, which will enable you to create a new password.
A Guide to Making Wise FinTech Choices
There are many FinTech apps on the market; choosing one can be quite confusing and difficult. Nevertheless, you can make a wise choice of a FinTech product or app if you consider the following points:
- Research the company to know whether it is a reputable one that you can trust.
- Find out whether the FinTech company stores your login credentials or allows you to be the only one who can access your account.
- Inquire whether the FinTech app can be linked to your bank account and whether you can control what information gets to them.
- Download FinTech apps from only trusted sources.
There are many risks associated with FinTech. They are mostly related to user privacy and product security. Some examples of the risks are cybersecurity vulnerabilities, intellectual property theft, identity theft, and inadequate data encryption and integrity.
FinTech is a problem because of its many challenges, especially those related to user safety and data security. Fraudsters and hackers continue to target the FinTech industry because it is very rich. Consumers prefer to be assured that nothing strange or unpleasant will happen to their personal data and hard-earned money. Meanwhile, FinTech companies are not having an easy time-fighting cybercriminals and using advanced technologies to secure customer accounts and data.
FinTech can be a threat to financial stability because it is faced with a lot of risks and challenges. The companies must be on the lookout for new hacker techniques to prevent fraudulent actors from stealing user data and escaping with customers’ wealth kept in their custody. Since financial stability deals with being able to meet your needs in good and bad times, using FinTech can become a risk. Nevertheless, there are some safety tips in this article which you can use to keep your apps and digital accounts secure.
FinTech apps are diverse and uncountable. Therefore, it is difficult to say which one is the best among them. Besides, every app was created to satisfy certain users and their areas of needs.
On our website, you can find FinTech apps for the following purposes: payment cards, personal accounts, business accounts, virtual cards, multi-currency accounts, savings accounts, checking or current accounts, as well as personal IBAN accounts, merchant accounts, money transfers, cryptocurrency accounts, and personal loans. Try to read our ratings and descriptions of the apps you are interested in to choose the best.
Yes, regulated FinTech companies are generally safe. Many of them invest heavily in the security of their platforms, products, and services to protect users and secure their accounts. They also try to comply with international standards for best security and safety practices in the face of several challenges like privacy, data security, and cyber fraud.
FinTech apps refer to software developed to enable individuals or businesses to leverage online technology, smartphones, and computers to carry out financial transactions in easy, fast, safe, secure, and automated ways instead of using traditional methods.
The Bottom Line
The financial technology market has continued to expand, and investments in data security and digital account protection will remain on the rise. However, as long as security and safety issues are not yet overcome in the industry, many consumers will continue to be cautious about using FinTech products and services.
In this article, we have shown how FinTech companies and users of financial products and services can secure data, benefit from encryption technology, and develop app protection systems and practices over time. Two-factor authentication, repeat KYC in the event of a questionable transaction, and safeguarding against automated payments in games are a few examples of the ways FinTech companies can enhance the security of their apps.
Furthermore, over time, it has been established that most FinTech users access their bank accounts via the mobile applications of financial companies more often than the desktop platforms created for computer access. Based on this development, the likelihood of account hacking is decreased because it is easier to break the security of a computer or an online platform than that of a mobile app. Therefore, we can conclude that FinTech apps are safe to use provided that the companies and consumers work together to sustain their safety and security.