The Significance of Balancing Convenience and Security in Fintech

In the tech-driven digital world, “security” reigns as the most crucial aspect for people who prefer shopping online, but convenience doesn’t fall far behind, and an unpleasant experience is simply not acceptable. At the same time, technological advancements continue to drive innovation in digital transactions and allow people to access their accounts with ease. It is more convenient for users to get their financial information, the easier it is for cybercriminals to access the same information. According to Cyber Crime Statistics 2023, with over 2328 attacks occurring daily, an average of 8,00,000 occurring yearly, there is a hacker attack every 39 seconds. Further, it is predicted that 2023 could face around 33 billion account breaches. 

Balancing convenience and security is critical to providing a seamless customer experience while keeping sensitive data secure in today’s fast-paced fintech world. Though cybercriminals are constantly refining their techniques, security measures must be continuously evaluated and adapted with no margin for error. Zero Trust Principles, a concept popularised by Forrester Research Analysts in 2010, offer a new way to approach security in the fintech industry; however, it often creates inconvenience for users. Fintech companies must offer users quick and easy access to financial services. Whether it’s about checking account balances, making payments, or applying for a loan, every user expects a fast and frictionless experience. This expectation is growing rapidly as more fintech companies enter the market. Fintech firms must balance back and forth to make sure that end users can find their financial information conveniently without negotiating their security. 

Zero Trust Principles: A New Outlook to Security 

As the security concern grows with the advanced technologies, zero-trust principles offer a new approach to security in Fintech. Zero trust assumes that all users and devices should be verified before accessing any resources instead of assuming that users and devices inside the organisation’s perimeter can be trusted. This approach creates a secure and trusted environment by reducing the attack surface and ensuring only authorised users can access sensitive data. According to research firm Markets and Markets, it is predicted that the global zero-trust security market will grow from $19.6 billion in 2020 to $51.6 billion by 2026. Though zero trust principles ensure intact security for users, they can also cause inconvenience for users. For instance, it requires two-factor authentication during every login process, ultimately creating frustration for users who want to check their account balance in a jiffy. 

To achieve the balance between convenience and security, fintech companies should take a holistic approach to security. This simply means working on individual security measures and considering the entire user journey. To achieve this sweet spot, fintech companies follow an approach such as: 

Using Risk-Based Authentication 

Risk-based authentication is an approach to authentication that uses contextual information to determine the risk level of a login attempt. For instance, if a user attempts to log in from a device or location he has never used, the risk level is higher. Using risk-based authentication, fintech companies can administer diligent authentication measures whenever the risk level is high while enabling low-risk users to log in swiftly. 

Implementing Multi-Factor Authentication Discreetly 

Multi-factor authentication is an appropriate way to curb the risk of a data breach or hacking, but it can also create inconvenience for the users. Fintech companies need to balance this trade-off by strategically implementing multi-factor authentication. For instance, making two-factor authentication available for high-risk transactions like money transfers while allowing single-factor authentication for low-risk transactions like checking account balances.

Enlightening Users About Security  

Education can work as a shield against cyber threats. Fintech companies must educate users about security to achieve the sweet spot between convenience and security. They must give users clear and concise information about security and follow the best practices, like using robust passwords, avoiding phishing scams, not sharing passwords, etc. By enlightening users about security, fintech companies can quickly reduce the risk of security incidents caused by user errors. 

As security is becoming paramount for customers, India is gaining investment in Zero Trust Security in diverse sectors like auto, e-commerce, entertainment, fintech, and D2C. According to Data Security in the Age of Zero Trust 2021, 62% of respondents have indicated that they have adopted a zero trust strategy. Fintech companies can offer users a seamless and secure experience by adopting zero-trust principles. However, it is important to understand that security and convenience are not mutually exclusive. Convenience can improve security by eliminating the likelihood of users taking shortcuts or using insecure ways to access their financial accounts. Thus, fintech companies need to build trust among their users by bridging the gap between convenience and security. Zero trust can play a pivotal role in maintaining the balance between convenience and security. 

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