By Genify on 30/05/2023, 00:35:31
In the ever-evolving world of finance, digital banking fintech seamlessly blends technology and banking services, creating innovative approaches and applications in the financial and banking fields and providing end users with convenience, speed, and tailored experiences. However, data privacy and security concerns arise as all banking processes, transactions, and customer data are digitized.
That said, digital banking fintech prioritizes customer data security and privacy. Not only that, but the impact of digital banking fintech in this area is quite significant. Continue reading this article to learn more about the security measures and technologies implemented to protect financial and banking information and transactions.
The impact of digital banking fintech on banking data security and protection is not only major, but it is also the beginning of further advancements, which will sharpen all security and privacy measures in the future of digital banking fintech. Some of the currently utilized technologies for customer data security and privacy are the following:
The impact of digital banking fintech on data privacy and security is evident through improved authentication and access control. It is important to note that traditional authentication methods, such as passwords, have proven vulnerable to cyber threats. So, digital banking fintech utilizes highly advanced authentication mechanisms, such as biometric identification.
In digital banking platforms and user accounts, biometric identification refers to the use of unique biological features, including fingerprints and facial recognition. These identifiers add an additional layer of security to users’ accounts and data. Moreover, digital banking fintech utilizes multi-factor authentication, requiring customers to provide several pieces of evidence to prove their identity and access their accounts. The information requested includes passwords, tokens, and SMS verification codes.
Encryption plays a crucial role in protecting customer data privacy and security. Encryption refers to the process of transferring data into unreadable codes, which cannot be deciphered unless with the appropriate decryption key.
This way, encryption enhances data security and confidentiality against unauthorized access. Not only that, but encryption also keeps data unreadable and unusable in case unauthorized parties access customers’ data, improving the overall security of customer information.
Therefore, fintech platforms use encryption algorithms to protect sensitive customer data at rest and during transmission. Moreover, digital banking fintech platforms employ secure data transmissions protocols, such as Secure Sockets Layer (SSL) and Transport Layer Security (TLS), to establish encrypted connections between users’ devices and the banking systems. This ensures that data exchanged between customers and fintech platforms stays encrypted during transmission, reducing the risk of interception and tampering.
Digital banking fintech leverages advanced artificial intelligence (AI) technologies like machine learning to achieve financial data protection. Simply put, machine learning algorithms analyze vast amounts of customer data and behavior to learn each customer’s typical behavior patterns.
In other words, these algorithms analyze and monitor customers’ behaviors and transactions in real-time to identify suspicious transactions and abnormal behavior immediately. This way, financial institutions can proactively prevent fraud and protect customer accounts and data from unauthorized access and misuse.
The impact of digital banking fintech on banking data security and protection showcases to what extent customers’ data security and privacy have evolved. Digital banking fintech platforms implement built-in compliance features to adhere to regulatory frameworks, which state data privacy regulations. Said features enable financial institutions to meet regulatory requirements like providing customers with control over their data, obtaining consent for data processing, and enabling data portability.
Some of these regulations are the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States. By implementing these features, digital banking fintech platforms achieve high levels of transparency with customers regarding data collection, processing, and sharing practices. This way, they can rest assured that their explicit consent will be required for data usage.
Such regulatory compliance within digital banking fintech strengthens customer trust, confidence, and peace of mind, knowing that their personal information is handled per legal requirements and industry best practices.
Regarding explicit consent provided by end users, open banking, one of digital banking fintech’s current trends, also requires direct consent from users. It is necessary to enable the open banking system to share customers’ banking information and financial data with authorized third parties and financial services providers.
Genify’s APIs work with open banking systems, enabling them to operate most efficiently to provide users with a convenient and beneficial user experience beyond all expectations. Explore Genify’s APIs today for more.