Security Compliance Standards for Fintech

No one audits your fintech company until everyone does. So here are 6 things I’d review if I were scaling a fintech. At the beginning, everything works. • Your scrappy setup • Your one-size-fits-all contract • Your "we’ll deal with that later" mindset And in the early days, that’s fine. • You’re small • You’re fast • No one’s watching too closely But then you grow. • More users • More money • More visibility And that’s when things shift. • Regulators start paying attention • Investors ask harder questions • And the systems you built on Day 1 start to crack on Day 500 I’ve seen this pattern in fintech more than any other space. • Speed gets the spotlight • But structure builds the stage If you’re growing - good. But don’t let momentum blind you. The legal stuff you ignored at the start? It won’t ignore you later. So if you want to future-proof your legal foundation in fintech, here’s what I recommend: 1 // Schedule regular legal "Health Checks" • Review contracts, compliance policies, and data handling every 6–12 months • Don’t wait for a problem to do it • Involve legal counsel familiar with the fintech space to keep up with RBI, SEBI, and DPDP changes 2 // Upgrade your contracts proactively • Replace generic templates with sector-specific agreements • Make sure your terms with banks, partners, vendors, and users reflect your current scale, products, and risks 3 // Stay ahead of regulatory shifts • Monitor RBI, SEBI, DPDP updates • Subscribe to official circulars and advisories  • Adjust your systems before you get flagged Assign someone to own compliance and tracking if you haven’t already. 4 // Update your compliance & audit trail • Scale KYC, AML, and data localization compliance process with your user base • Maintain clear, audit-friendly documentation • Record every legal and compliance decision 5 // Train and communicate internally • Make sure your team understands the latest protocols • Train new and existing employees on privacy, fraud, and data handling • Communicate escalation paths clearly 6 // Build for scale, not just survival • Scrutiny increases with revenue. Investors and regulators expect compliance by design • Professionalize your documentation, adopt compliance tools, and formalize board oversight Don’t just build momentum - build resilience. • Schedule your next legal check-in • Update your contracts now, not later • Build a foundation ready for Day 500 and beyond Preparation is what keeps success from turning into a crisis. That’s the real foundation of lasting growth. --- ✍ Tell me below: Do you build for resilience?

DPDP Act Decoded #30: Lifecycle Mapping — From Collection to Deletion (A Fintech Onboarding Flow) Most privacy programmes still map notices, consents and policies in silos. That is not how systems operate. Under the DPDP framework, compliance becomes clearer when you map one system end to end. Take a fintech onboarding flow. A user enters mobile number and PAN, uploads documents, completes verification, gets risk-screened, opens an account, receives communications, and eventually exits. This is not one privacy event. It is a chain of processing events across systems and actors. 1 Collection defines the system At collection, the fintech must show what data is processed, why, how rights can be exercised, and how grievances may be raised. Sections 4, 5 and 6, read with Rule 3, frame the basis of lawful consent-based processing. Where consent is used, it must be free, specific, informed, unconditional, unambiguous, and given through a clear affirmative action. This is not just a notice issue. It is a product design issue. 2 Use is a chain of handoffs KYC vendors, fraud engines, cloud and communication platforms all form part of the flow. Each handoff is a processing event. Section 8(1) is explicit: the Data Fiduciary remains responsible for processing on its behalf. You can outsource processing. You cannot outsource responsibility. Processor engagements must be governed by a valid contract and reflected in system design. 3 Decisioning raises the accuracy bar Where data is used to make a decision affecting the user, or disclosed to another Data Fiduciary, completeness, accuracy and consistency matter. Section 8(3) makes this a legal requirement. Weak pipelines here create legal risk. 4 Security must show up in operations Section 8(5) requires reasonable security safeguards. The Rules translate this into measures such as access control, logging, monitoring, backup and processor safeguards. Not just policy. System behaviour. 5 Breach response must be designed Section 8(6) requires notification to the Board and Data Principals. Rule 7 adds operational detail, including immediate intimation and follow-up information to the Board. The system must support detection, escalation, containment and coordination. 6 Deletion is where systems fail Is the purpose still served? Has consent been withdrawn? Is retention required by law? Has erasure been carried out across fiduciary and processors? Section 8(7), Section 8(8) and Rule 8 make this an operational obligation, subject to retention required by law. For fintechs, DPDP erasure must be reconciled with other applicable retention laws. Do not map compliance by document. Map it by lifecycle: collection → validation → sharing → decisioning → storage → grievance → breach → deletion That is where DPDP compliance becomes real. Relevant Provisions Sections 4, 5, 6, 8(1), 8(2), 8(3), 8(5), 8(6), 8(7), 8(8) Rules 3, 6, 7, 8 #DPDPAct #DataProtection #Fintech #Compliance #DPAPA #DPAP

🚨📝 27 NOV 2025. #PSD3 #PSR #Payments. EU lawmakers just agreed on PSD3 + the new Payment Services Regulation (PSR) - a major overhaul of how payments, fraud prevention and data access will work across Europe. One message stands out: if a provider fails to prevent fraud, they pay for it. 🔍 Key Takeaways: ▶️ PSPs carry the fraud bill. If a provider doesn’t implement proper fraud controls, it must cover the full customer loss. This includes impersonation scams, as long as the victim reports it. ▶️ Name-IBAN checks become mandatory. If the payee name doesn’t match the identifier, the PSP must stop the transfer and alert the payer. ▶️ Receiving PSPs must freeze suspicious inflows. They become the choke point for detecting mule accounts. ▶️ Online platforms face liability too. If they fail to remove flagged fraudulent content, they must reimburse PSPs that refunded victims. This closes a major DSA loophole. ▶️ Customers get real humans. Not just chatbots. PSPs must provide access to human support for fraud issues. ▶️ Cash access gets a boost. Shops will be able to offer €100–150 withdrawals, without forcing you to buy anything. A big win for rural areas. ▶️ Open banking barriers fall. Banks can’t block or discriminate against AIS/PIS providers. A list of “forbidden obstacles” will enforce real #OpenBanking. ▶️ Device makers must open up payment interfaces. Mobile and electronic service providers must let apps store and transfer payment data on fair terms. ▶️ Crypto gets a shortcut. #CASPs authorised under #MiCA can access a simplified licensing path when offering payment services. ▶️ Clearer fees. Currency conversion, ATM costs, and all charges must be shown up-front, before the payment is made. 🤷♂️ The So What? #Compliance #Fintech should: ✅ Rebuild fraud frameworks, especially around impersonation, risk scoring, authentication and mule monitoring. ✅ Prepare for stricter liability, with enhanced logging, evidence retention and customer support training. ✅ Check open banking readiness, including APIs, permission dashboards and non-discriminatory access rules. 📩 How are your teams preparing for PSD3/PSR’s fraud-liability shift? Curious to hear practical views from PSPs and fintech founders. #PSD3 | #PSR | #Payments | #FraudPrevention | #Fintech | #OpenBanking | #FinancialServices | #Regulation | #EUlaw

What happens when you Vibecode a Fintech application? 😬 During a recent engagement at SecurityWall we uncovered a critical access control failure caused by multiple small mistakes compounding into a critical-impact vulnerability. Like most fintech apps, users were required to enter a 6-digit PIN / FaceID before viewing full card details a control aligned with PCI DSS requirements and general secure design principles. Before PIN verification, the UI correctly displayed: • Masked PAN Only the last 4 digits visible So far, so good. 🚨 What We Actually Found The backend endpoint: /api/v1/cards/view?cardId=10103 …was accessible before PIN verification. While the response included the expected: "masked_card_number": "**** **** **** 1409" It also exposed an additional object: "pvtInfo": { "cvv": "123", "card_number": "000000000", "name": "namee", "expire": "00/99" } This completely bypassed PIN / FaceID protection, leaking full card details directly from the API. This issue clearly impacts: • PCI DSS Req 3 – Protection of stored cardholder data • PCI DSS Req 7 & 8 – Restrict access based on business need & strong auth And Then It Got Worse: The same endpoint was also vulnerable to a classic Insecure Direct Object Reference (IDOR). By simply changing: cardId=10103 → cardId=10102 An attacker could retrieve another user’s full card details no authorization checks, no ownership validation. This single chain of issues leads to: PCI DSS violations (PAN & CVV exposure, lack of access control) Authentication & authorization bypass High-impact financial fraud risk Potential mass card data exposure at scale Key Takeaways: • UI security ≠ API security • Masking on the frontend means nothing if the backend leaks data • Authorization must be enforced server-side, per object • Sensitive fields should never be returned unless absolutely required This is how small access control gaps snowball into critical fintech breaches. Security isn’t about adding more controls, It’s about placing the right controls at the right layer. #CyberSecurity #FintechSecurity #PCICompliance #IDOR #APISecurity #BugBounty #Pentesting #Vibecoding

The HMT Supervision Report 2023-24 offers a comprehensive analysis of the UK’s AML/CTF supervisory activities, highlighting risk assessments, enforcement actions, regulatory changes, and future priorities. The report is a critical resource for financial crime officers, outlining emerging threats, supervisory challenges, and strategic priorities under the UK’s Economic Crime Plan 2023-26. 🔍 Takeaways 1️⃣ Strengthening AML/CTF Supervision in the UK • 25 supervisory bodies oversee 90,000+ businesses, ensuring compliance with AML/CTF regulations. • Increased focus on risk-based approaches, targeting high-risk firms in finance, real estate, gambling, and professional services. • Expansion of regulatory oversight, including additional data collection on supervisory effectiveness. 2️⃣ Anti-Circumvention and Sanctions Compliance • The UK Sanctions and Anti-Money Laundering Act (SAMLA) mandates enhanced screening of financial transactions. • Supervisors now assess firms’ controls to prevent sanctions breaches, focusing on Russia-related financial flows. • Increased cross-agency coordination to detect trade-based money laundering (TBML) and sanctions evasion. 3️⃣ Heightened Focus on Financial Crime Risks in Crypto & Fintech • #Cryptoassets, e-money, and BNPL platforms are high-risk sectors due to AML vulnerabilities. • 86% of crypto firms’ applications for AML supervision were rejected or withdrawn due to non-compliance. • Supervisors identified deficiencies in CDD, transaction monitoring, and fraud risk controls across fintech firms. 4️⃣ Risk-Based Approach: Sector-Specific Insights • Financial Services: Retail banking, e-money, wealth management, and wholesale banking remain high-risk. • Real Estate: Growing use of shell companies and offshore structures to facilitate money laundering. • Gambling: Remote (online) casinos and betting remain high-risk, with weak controls over high-value transactions. • Professional Services: Trust & company service providers (TCSPs) remain major enablers of illicit finance. 5️⃣ Enforcement Trends and Increased Supervisory Scrutiny • Rise in AML fines and enforcement actions, targeting non-compliance in financial services, crypto, and real estate. • Supervisors identified an increasing number of unregistered firms conducting AML-regulated activity. • Random risk-based assessments found that 9% of firms required reclassification to higher risk levels. 📌 Recommendations ✔ Enhance KYC and sanctions screening to detect complex money laundering networks. ✔ Implement AI-driven transaction monitoring to mitigate crypto and BNPL risks. ✔ Strengthen risk-based approaches in high-risk sectors like real estate, gambling, and professional services. ✔ Prepare for increased regulatory scrutiny and align AML frameworks with UK’s Economic Crime Plan 2023-26. ✔ Engage with regulatory bodies proactively to stay ahead of AML/CTF #compliance expectations. #AML #FinancialCrime #Sanctions