Does Your Product Comply with Latest Trends?" width="" height="" />Does Your Product Comply with Latest Trends?" width="" height="" />
Complying with an ever-changing regulatory environment in the banking industry seems to be a distant dream for one too many banks. And those financial institutions that are successfully adopting mobile applications, have an even more significant number of regulations to comply with. While the price of meeting the mobile banking compliance requirements is high, the non-compliance causes reputational damage, financial and legal loss, and increases technical debt. Keep reading and learn about the latest mobile banking compliance requirements and ways to meet them.
With the appearance of face recognition, fingerprint, electronic signatures, and other new technologies implemented in mobile banking apps, businesses gain larger shares of clientele. The application of new technologies also poses new ways to compromise the sensitive financial data of their clients. To proactively safeguard data, countries, and financial associations make more and more efforts in imposing mobile banking requirements on all financial institutions. These requirements also concern mobile banking applications that operate with personal data and are used as a source of breaching financial data.
The policymakers and regulators keep their focus on enhancing cybersecurity, bolstering digital identities and online authentication, and safeguarding consumers as they shift to digital payments and currencies. Here are a couple of the latest mobile banking compliance requirements issued between 2021 and 2022:
Improvements in digital identity protection
Personal data protection initiatives
While the mobile banking audit checklist with compliance requirements is growing bigger and bigger, the nature of issues stays the same .
For instance, according to OWASP research on the banking application malfunctioning shows a slight shift but not full disappearance of basic issues like broken authentification.
As we can observe, the major mobile banking compliance requirements concern personal data security and call for enforcing direct responsibility for data breaches on the side of the financial institution. We can roughly divide the top mobile banking compliance requirements into the following categories.
Data privacy is one of the primary mobile banking compliance requirements that aim to protect such sensitive information as social security numbers, passwords, and other personal data crucial for making online money transfers. To ensure data privacy, it’s advised to follow the basic mobile banking compliance checklist that includes:
This checklist adherence to contemporary legal frameworks, and it is a step towards a mobile banking policy that addresses compliance problems and phishing attempts.
Build cutting-edge banking apps that comply with GDPR
Data breaching can happen almost anywhere and anytime: during a transaction, through downloaded malware, insecure internet connection, in the bank office, through embedded finance solutions , and on servers. Thus, it’s important to go beyond adhering to mobile banking compliance requirements. Security should be a number one priority at every step and level of your solution. Here are a couple of ideas on how to improve security:
Governments and financial institution unions are making serious advances in the direction of enforcing responsibility for data breaching among fintech service providers. For instance, in the US, banks are legally obligated by FDIC, OCC, and Fed rules to notify their regulators about data breaches in the next 36 hours after the breach identification.
For those banks with mobile applications, it’s crucial to know and abide by the rules and mobile banking compliance requirements of their target countries. Software-wise, it’s more than advised to boost digital financial solutions with AI and ML-based malware identification tools.
The GDPR is the most important data protection regulation in the EU that created a resonance in the tech industry and dictated new mobile banking compliance requirements. All digital companies, including financial institutions, have to comply with the regulation’s rules in order to protect sensitive user data and avoid penalties.
It’s a common practice for digital businesses to ask users to give permission for gathering data. This process also includes a list of on-and-off line processes related to data collection:
The mobile banking compliance requirements also concern all third-party service providers and partners that have access to user data. Thus, by gathering user data, financial institutions are obligated to make sure that there are no mobile banking compliance issues neither in their own system nor in the parters’. The same requirements apply to the fintech development outsourcing companies that build fintech solutions for banks .
As a rule, phishing attempts and compliance problems are caused by unreliable, flawed user entry and authentication techniques. That’s why mobile banking security procedures have become more stringent over time. Nowadays, banks must employ newer, more secure systems that don't rely on user participation (and are thus resistant to phishing efforts) and adhere to contemporary legal frameworks in order to address these issues. Here is a draft of a mobile banking compliance requirements checklist for three key areas that banks must really take into account when developing their mobile security procedures.
Security, intuitiveness, and trust are the three vital elements that help brands build trust with clients. However, when you mix mobile banking compliance requirements and regulatory compliance, things get complicated. Some banks build trust by making a secure onboarding process and account reactivation.
1. Let people use the app without registration at first. One way to do this is to allow users to use an app initially, without having to fill in private data. Some banks choose to gate some of the deeper functionalities behind a signup form. In short, prove the value of your app first before asking them to register.
2. Include safety measures. Increase users’ sense of security by taking safety measures that demonstrate a serious commitment to protecting their data. For instance, log users out instantly after a certain period of time, even if they are still using the app. Or think about sending in-app notifications each time the clients make a purchase.
3. Explain why the application needs personal information. Each new user must provide personal information to an app as part of the registration process. Some banks increase the level of trust by outlining plans for the information and how they intend to use it.
Those users who are unfamiliar with your company or who have just downloaded your app won't be eager to share any personal information. They will, however, be more willing to share their information if the application explains how the software will use it and how their experience will be significantly enhanced.
From large to small, international banks are implementing Multifactor Authentication. The MFA is a security measure that requires users to confirm their identity by presenting a variety of proof including a password, a security token, or by using biometric verification techniques.
And while the MFA isn’t on the list of actual mobile banking compliance requirements, they are already up and running in the majority of leading fintech applications. Take a look at a list of MFA implementation best practices:
Create mechanisms that will ensure in-app mobile protection and inform users about potential problems. With in-app mobile protection, users can easily delete threats from their own devices, learn about potential issues, and prevent devices from malfunctioning.
Banks and fintech firms can use the track signals from mobile devices by connecting payment provider systems via API. They might use the information, for instance, to create an incident in their Security Information and Event Management (SIEM) system or to thwart a fraudulent payment in their Fraud Detection System (FDS).
Binariks has robust experience in creating fintech apps that adhere to the specific mobile banking compliance requirements and enable security at each stage of product development. We offer a wide arsenal of services including financial software development and mobile app development conducted by solution architects, business analysts, engineers, and quality assurance experts with hands-on experience in the fintech industry.
Recently, Binariks finished building a secure commercial messaging platform for a Swedish IT company. This solution allows banks, companies, and government agencies to authenticate people over the phone or online by using a national electronic identification method.
Prior to the collaboration with Binariks, the customer used a variety of independent applications that offered various services connected to the Swedish Bank ID verification. The programs that were already in use were neither reliable nor safe enough to operate with national identity codes. We helped our client to bring the solution to another level by combining the features of all apps into one highly scalable solution.
As a result, the platform allows users to:
Our team of experts helps fintech businesses all around the world extend their business opportunities by leveraging new technologies and meeting essential mobile banking compliance requirements. Drop us a line and we’ll help you to create reliable, secure, and innovative solutions.
The compliance requirements in mobile banking are the rules and regulations that obligate banks and financial institutions to handle sensitive user information in a secure manner.
Depending on the severity of the violation, a company that fails to meet the mobile banking compliance requirements issued by GDPR and other regulations carries financial penalties.
According to OWASP, the most frequent mobile banking compliance issues are improper platform usage, insecure data storage, and insecure communication.
