Managing Risk and Security Concerns During Fintech Project Rollouts

The financial technology (fintech) industry has seen rapid growth and innovation in recent years. New fintech projects aim to disrupt traditional financial services and make financial management more efficient and accessible. However, rolling out new fintech products also introduces risks that need to be managed carefully during development and launch.

As fintech startups rush to get their new offerings to market ahead of competitors, they can sometimes overlook security and risk protocols in product design or rollout plans. This can expose sensitive user data or financial information to potential threats. Established financial institutions venturing into fintech project development may underestimate the new attack surfaces created. Both scenarios underscore the need for comprehensive risk assessment and mitigation strategies tailored to fintech implementations.

In this post, we’ll discuss some of the unique risks involved in fintech projects and best practices for managing them. Whether you’re rolling out a new payments app or blockchain-based investment platform, keeping risks top of mind during rollout is key to longer-term success.

Common Risks and Threat Vectors

Many fintech products handle highly sensitive financial or personal data which makes them an attractive target for cybercriminals. Some of the common risks include:

• Data breaches – Insufficient data encryption or access controls can enable hackers to steal credentials or financial information.
• Fraud – FinTech apps can facilitate financial fraud schemes without rigorous identity verification and transaction safeguards.
• Cyber attacks – DDoS attacks, malware infections, or injection attacks can all undermine or exploit fintech platforms and transactions.
• Insider threats – Dishonest employees or third-party partners may abuse access rights to data for illicit gain.

The nature of a particular fintech product also introduces more specialized risks:

• Blockchain – Faulty smart contracts, flawed token designs, or stolen private keys compromise blockchain-dependent offerings.
• Lending – Unreliable credit scoring models or identity verification processes increase default risks.
• Payments – Outdated POS systems or lack of tokenization leaves merchant and customer data vulnerable.

For any fintech rollout, conducting comprehensive threat modelling to map out possible risk scenarios is recommended before launch. This should cover technical infrastructure, application logic, data flows, key processes, third-party integrations, and human error risks.

Mitigating Risk During Project Rollout

Building security from the start rather than leaving it as an afterthought is the most effective approach when planning a fintech project deployment. This “secure by design” ethos should permeate technology, operations, and governance strategies. Some key elements include:

1. Secure Coding Standards

• Adhere to leading OWASP protocols during software design – this includes input validation, proper encryption, access control checks, and more.
• Conduct regular static and dynamic application security testing throughout the coding process.
• Incorporate maintenance windows to quickly patch detected vulnerabilities.

2. Solid Technology Infrastructure

• Leverage certified cloud infrastructure, which has robust controls baked in for network security, resilience, uptime and redundancy.
• Implement only thoroughly vetted third-party fintech software platforms and services. Review audits and compliance reports.
• Build with well-known open-source fintech components with strong community testing behind them.

3. Actionable Policies

• Develop comprehensive security and risk management policies aligned to ISO 27001 or NIST standards.
• Clearly define all financial controls, fraud monitoring, breach response programs, third-party due diligence, and access restrictions.
• Conduct regular reviews, audits and risk assessments to maintain alignment of controls to the evolving risk landscape.

4. Ongoing Personnel Training

• Educate all staff involved in the FinTech project on security fundamentals and high-risk areas through onboarding and ongoing refreshers.
• Conduct phishing simulation exercises to bolster human firewalls.
• Develop whistleblower policies and securely intake reported violations.

5. Extensive Testing and Pilots

• Test the fintech platform extensively in sandbox environments, mimicking real-world use before launch.
• Conduct limited pilot rollouts to small test groups first before broad customer onboarding.
• Develop rollout plans to ramp up slowly which allows time to monitor systems for issues.
• Ensure quick rollback plans to previous stable functionality is possible in case of issues.

While the above covers some high level guidelines, every fintech product and specific implementation will have its own unique risks to assess and manage. Developing your own security and risk checklist tailored to your offering is highly recommended. Proactively managing risks during initial rollout stages pays significant dividends longer term by preventing or minimizing breach impacts down the road.

At our fintech development company, we leverage extensive experience in securely launching customized fintech solutions like wallets, exchanges, lending platforms, and blockchain management systems for both startups and enterprises. When considering custom-made fintech projects development for your next offering, be sure to evaluate partners closely on their security competencies during rollout. This ensures your innovative fintech product launch goes smoothly while safeguarding sensitive data and transactions. Contact our experts today to learn more.