An increasingly valuable consideration, which I reviewed this past week, is data protection and regulations in Cybersecurity Architecture, these equivocal paradigms of standard enable troves of information to remain secure. As enterprise cloud software providers spin up more data centers, the growing concerns of privacy and usage continue to rise. The age of technological innovation has inspired more corporations worldwide to reach cloud scalability. In the focused objective of financial technology (FinTech) firms, becoming top-tier service providers internationally, there are some frameworks and regulations, they must enable to achieve the required standards.
When working in Europe, the Middle East and Africa (EMEA) and Asia–Pacific (APAC) markets, the governments and polices differ much quicker longitudinally than North America. One widely known European requirement is General Data Protection Regulation (GDRP) which dictates policy and for protecting the data of its citizens, with countries like Germany even further refining the conditions for their Federal Data Protection Act (BDSG) considerations. In Asia for example, China has defined their own data polices, such as the Personal Information Protection Law (PIPL). In all of these, policies there are restrictions about usage, storage, and transference of data outside of the given confines of the country.
It is important to localize policy around the sphere of influence that the financial technology firm intends to find customers, build traction, and service users. For FinTech to be successful and permitted to do business in these countries they should begin with a policy around GDRP, build a team specific to Europe, and dedicate infrastructure to these areas. When considering this business model, it is increasingly important to understand GDPR and the overall functional elements of data. In the handling of the data, specifically Payment Card Industry Data Security Standard (PCI DSS). In addition to GDPR, it is equally as important to incorporate cybersecurity frameworks that go down to a technical degree, and payment frameworks like PCI DSS that handle and protect financial data.
When applying GDPR principles to a FinTech business model, an efficient focus would follow the key regulatory points. To achieve these principles would require that the various organizational groups, team around these items to provide their interpretation and review with the provided legislation.
In the business model development process the legal team would focus on ‘Lawfulness, fairness and transparency’, while the operations team could focus on ‘Purpose limitation’, ‘Data minimization’, and ‘Accuracy’. The technical team could focus on ‘Storage limitation’, ‘Integrity and confidentiality’, and ‘Accountability’. Through these various stages, each team could split the responsibility and audit the others based on their expertise as internal controller and processors.
In the handling of payment information, card data, and the contributing metadata composing profiles of users connected to payment accounts, businesses globally follow and comply with the PCI DSS standard. As digital payment systems increase in proclivity, the need for PCI DSS arose, which drew attention to the required principles of the compliance.
When enhancing the FinTech model for PCI DSS, the technical and financial team should both participate in reviewing ‘Firewall configuration’, Vendor-supplied defaults’, ‘Data protections’, ‘Encrypted transmissions’, ‘Anti-virus software’, ‘Secure applications’, ‘Restricted data access’, ‘Unique identifiers’, ‘Limited physical access’, ‘Tracking and monitoring’, ‘Regular testing’, and ‘Internal training’.
These requirements should be established, developed and externally audited to avoid any tampering or collusion around the system. In various stages, the security team and development team should implement these cybersecurity protections to limit any individual from gaining access, through segmentation, physical separation, and digital barriers.
In a co-alignment model, these two very considered standards GDPR and PCI DSS should stream down from the CEO, CFO, COO, CTO, and CIO to incorporate these data protections in an interlocking formation. Each of these department heads should implement the training that is required to daily facilitate and maintain these processes at any job level.
An organization designed around data protection, security, and principles of least trust will face many challenges in practice, specifically with these very focused frameworks. In the application of these frameworks to a FinTech and cybersecurity model, there will be many hand-offs and interactions that seem risky, which will require auditing and compensating controls for the business method of operation.
There are additional risks in collaboration as these frameworks require separation of controls in many senses, through the control and processing of the data, that could become expensive and operationally risky. It is in the best interest of a FinTech firm to internalize and stagger the company’s business to operate as departments for these policies, where there are clear boundaries between the various groups and the information being transferred.
Once the units are aligned, they can then develop a competency, reviewing the scope of their work, and providing this information back to a controlling group which internally audits, and hosts the external audits, for quality assurance. When these departments are established, each should have their own responsibility and defined operational pathway to handle incidents, report issues, and resolve regular business matters like data requests or processes for cancelling payments.
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