The financial services landscape in the EU is evolving rapidly, with new regulations introducing stricter compliance requirements for mobile apps handling payments, crypto-assets, and digital financial services.
For financial service providers operating in or expanding to the EU, understanding these regulations is essential. Compliance is now directly tied to mobile app security, and failing to meet these standards could limit market access and erode user trust.
This blog breaks down three critical regulations every financial app developer should know, PSD3, MiCA, and DORA, and explains why built-in mobile app security is essential for both compliance and protection.
PSD3: Modernizing payments and strengthening open banking
What is PSD3?
The payment services directive 3 (PSD3) updates and enhances the EU’s legal framework for digital payments. Building on PSD2, it strengthens consumer protection, standardizes open banking requirements, and enhances payment security across banking, payment, and wallet apps.
Who is impacted?
PSD3 applies to a wide range of mobile apps, including:
- Banking apps offering account access and open banking features
- Payment apps facilitating peer-to-peer, merchant, and bill payments
- Digital wallets supporting digital transactions
Key security requirements under PSD3
To comply with PSD3, mobile apps must implement:
- Strong customer authentication (SCA) with multi-factor verification
- Real-time fraud monitoring to detect and block suspicious transactions
- Secure open banking APIs with end-to-end encryption and strong identity verification
- Incident reporting processes to quickly notify regulators of security incidents
- Regular operational resilience testing, including simulated cyberattacks
- Secure software development practices, embedding security and privacy from the first line of code
MiCA: Regulating the crypto-asset ecosystem
What is MiCA?
The markets in crypto-assets regulation (MiCA) introduces a harmonized regulatory framework for crypto-assets across the EU. It covers both crypto-asset issuers and crypto-asset service providers (CASPs), such as exchanges, trading platforms, and custodial wallet providers.
Who is impacted?
Mobile apps offering crypto services fall directly under MiCA, including:
- Wallet apps that manage users’ crypto-assets
- Crypto trading apps enabling buying, selling, and exchanging assets
Key security requirements under MiCA
To comply with MiCA, apps must adopt:
- Secure custody controls, including strong encryption of private keys and multi-signature verification
- Operational resilience testing, such as regular cybersecurity drills and attack simulations
- Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) processes to verify user identities and monitor transactions
- Automated market abuse detection to prevent insider trading and manipulation
- dData portability to allow users to export transaction data in a structured format
- Incident reporting requirements for disclosing security incidents to regulators
DORA: ensuring digital resilience for financial services
What is DORA?
The digital operational resilience act (DORA) creates a standardized ICT risk management framework for financial institutions across the EU. It ensures that financial firms can withstand, respond to, and recover from cyberattacks and operational disruptions.
Who is impacted?
DORA applies to all EU financial institutions using mobile apps, including:
- Banking apps providing account and payment access
- Investment apps offering trading and portfolio management
- Insurance apps handling policies, claims, and customer interactions
- Payment apps processing transactions between users and merchants
Key security requirements under DORA
Under DORA, Financial services provided with mobile apps must demonstrate:
- Secure development and deployment processes, including secure coding, pre-launch testing, and continuous monitoring
- Comprehensive ICT risk management throughout the app’s lifecycle
- Real-time threat detection and incident response, with automated alerts for abnormal activity
- Mandatory incident reporting, with short timeframes for notifying regulators
- Operational resilience testing, including penetration testing and red teaming
- Third-party risk management, with security oversight of external technology providers
- Data integrity and backup, ensuring user data can be rapidly recovered after incidents
- Secure external interfaces, using encryption and monitoring for all integrations with banking systems, trading platforms, and payment gateways
Mobile app security is at the heart of regulatory compliance
While PSD3, MiCA, and DORA each target different parts of the financial ecosystem, they all require one thing in common: robust financial app security. Financial apps without built-in security put themselves at risk for:
- Compliance violations resulting in fines or market exclusion
- Data breaches exposing customer information
- Service disruptions that damage reputation and trust
- Financial fraud enabled by weak authentication or monitoring
To align with these regulations, financial apps need multi-layered protection, including:
As financial regulations evolve, compliance and security are becoming inseparable for mobile apps in the financial sector. PSD3, MiCA, and DORA all emphasize the need for proactive security measures to protect user data, prevent fraud, and ensure operational resilience. By integrating robust security practices such as strong authentication, secure coding, and real-time threat monitoring, financial institutions can meet regulatory expectations, strengthen user trust, and safeguard digital transactions in an increasingly complex threat landscape.