Today, much of your money is in apps on your phone, whether it’s your retirement savings or money you spend day to day. This is convenient, but it also allows hackers and scammers to get their hands on what you have earned. Just this year, crypto thefts reached into the billions of dollars globally, while traditional fintech platforms suffered their own security incidents, prompting users to rush to secure their accounts.
The good news is that you can set yourself up for success in security by adopting smart security practices and choosing the right tools, while ensuring that most of these steps take about the same amount of time as waiting in line at a brick-and-mortar bank.
Two-factor authentication and password management
Two-factor authentication is your first line of defense, and every fintech app you use must have it enabled without exception. This means hackers need more than just a password to get in since they’d also need access to your phone or authentication app. Use apps like Google Authenticator or Authy instead of SMS codes, since they can be easily intercepted in SIM-swapping attacks that have become more prevalent lately. Over 78% people globally use 2FA for personal accounts and over 73% for work.
Additionally, a password manager will change how you secure your accounts, making security almost effortless once it’s set up. Most people reuse passwords across multiple sites, and when one service is hacked, hackers try those credentials on every other service. Services such as Bitwarden and 1Password cost less than $5 a month and create unique, complex passwords for each account.
Privacy in digital finance
Privacy concerns impact many decisions in fintech, such as which apps you share your information with and how much personal information you ultimately give. Most traditional fintechs require extensive verification, including social security numbers, addresses, and job history. This can make platforms vulnerable to hacks.
Crypto investors sensitive to privacy have several options that require minimal identification. Peer-to-peer platforms and no-verification wallets like WEEX and Best Wallet are the easiest ways to buy Bitcoin and other crypto without an ID (source:https://99bitcoins.com/buy-bitcoin/anonymously-without-id/). On top of that, you can also buy Bitcoin at ATMs. You can purchase crypto at ATMs with cash, often only needing to provide a phone number to complete the small transaction. However, the fees range from 5% to 20%.
The trade-off is between privacy, security, and recourse. If you try to avoid being identified, you’ll have less recourse if something goes wrong. However, you can anonymize yourself with bank and investment apps by adjusting their settings and limiting the synchronization of information to only what’s necessary for the app to work.
Hardware wallets and VPN safety
If you are holding crypto for a long time, a hardware wallet is essential for every crypto investor. These are physical devices that keep your private keys “offline,” meaning they are not susceptible to internet attacks while stored on the device. They connect to your computer only when you have to make transactions. Ledger and Trezor make reliable hardware wallets, even for $60 or $200, making these devices seem like cheap insurance for protecting thousands or even millions in digital assets.
Virtual Private Networks (VPNs) provide an additional layer of security beyond your financial account. VPNs encrypt your data and hide your location, which is very important when you use public WiFi, such as in coffee shops or airports. NordVPN and ProtonVPN offer good service for around $10 per month.
Safeguarding your recovery phrases and credentials
Your recovery phrase is the most important thing you have when dealing with crypto, and it’s no stretch to say you should exercise the same caution with this as though it were the deed to your house. When you create a crypto wallet, you are given a series of 12 or 24 words that can restore your entire wallet should you lose it. Write this down, and put it away in a safe or safety deposit box. Never take a photograph of your recovery phrase or store it digitally, as anyone who has this array of words can get your crypto, no questions asked.
Some phishing attempts have become so sophisticated that even security professionals can struggle to spot them at a glance. Scammers send emails and texts that appear to be from your exchange or wallet provider, using logos and layouts that mimic your provider’s branding. To stay safe from this threat, always type the URL of your exchange into your browser instead of clicking links in emails, even if the messages appear completely legitimate.
Preventing social engineering scams
Social engineering doesn’t require technical skills, which makes it one of the most common attack methods since anyone can try it. A scammer will call or send you an email or text posing as a tech support person for your exchange or bank. They will create a sense of urgency by asserting that your account has been compromised or locked. They then ask for your credentials or recovery phrase to “repair” the problem, and in the turmoil of the moment, many people hand over this information without a second thought.
Remember that legitimate support persons never ask for your password, PIN codes, or recovery phrase, no matter what emergency they claim is happening. If you get an unexpected call about your account, hang up and contact that company through its official website.
Maintaining awareness and monitoring your accounts
The security threats affecting fintech change daily as hackers develop new ways to penetrate systems and exploit newly created vulnerabilities. Follow your fintech supplier on social media and be sure to download app updates as quickly as possible, since these apps often fix holes that hackers are sure to find. Join communities like r/CryptoCurrency, r/PersonalFinance, and similar groups where people share experiences and warn others about the latest scams as they happen.
Check your account activity regularly since catching suspicious behavior early can mean the difference between a minor inconvenience and a major loss. Almost all apps let users view login and transaction history, so set aside some time each week to review these logs for any unfamiliar transactions or logins.
Distributing assets and using withdrawal whitelists
Spreading your assets across multiple wallets and accounts reduces your exposure if any one platform is compromised. Keep your trading crypto on exchanges you can easily access, while transferring the longer-term holdings to hardware wallets. For traditional investments, do not keep all your funds with a single fintech platform, as spreading investments across providers creates backup options.
Enable withdrawal whitelists on your exchanges if they offer this feature. This informs your exchanges which wallet addresses may receive your funds. Therefore, although a hacker might log in to your account with your credentials, they cannot send your crypto to their wallet. All major exchanges offer this option under security settings.
The bottom line
The origin of fintech security isn’t driven by paranoia but by careful foresight, taking the essential steps to safeguard what you’ve built. Start with the baseline moves: two-factor authentication, impossible-to-crack passwords, and hardware wallets for crypto. Look out for phishing scams and update your software regularly.
It is simple moves like this that will save you from the majority of security threats you could become vulnerable to. Spend one hour this week preparing and checking your existing security system. You will thank yourself in the future for taking the time to relieve yourself and avoid the stress and financial losses that come with the necessary security breaches.
