July 03, 2025
In the worlds of fintech and regtech, where software must operate within frameworks dictated by financial regulators, compliance is not an afterthought; it’s a foundational principle. Developers and tech creators working in these sectors are tasked with building systems that not only perform complex financial or regulatory tasks but also adhere to evolving standards around privacy, data protection, and digital identity. Failure to meet these expectations can result in severe legal, financial, and reputational consequences.
Secure development practices must be embedded throughout the entire software development lifecycle (SDLC), from planning and coding to deployment and maintenance. These practices are not merely technical requirements; they are strategic imperatives that help ensure your applications can meet the high compliance bar set by regulators and auditors.
Compliance in fintech and regtech hinges on data integrity, transparency, user privacy, and the traceability of all operations. Unlike general-purpose software, applications in these fields often handle highly sensitive data — banking transactions, identity verification, financial risk modeling, or audit trails. Consequently, any security lapse can be viewed not just as a technical bug, but as a regulatory breach.
To achieve compliance, security needs to be treated as a core requirement. Security-by-design is a prerequisite for deployment, investor confidence, and customer trust.
1. Shift Left on Security
The earlier security is introduced into the development lifecycle, the better. Waiting until testing or deployment stages to address vulnerabilities leads to costly rework and missed risks. Shifting security left means:
By involving security experts early and often, teams can reduce vulnerability windows and ensure compliance checkpoints are met continuously.
2. Adopt a Zero Trust Architecture
Zero trust assumes no system or user — internal or external — is automatically trustworthy. This model is ideal for fintech and regtech because of its rigorous access controls and audit-ready structure. Key principles include:
Implementing zero trust enhances your application’s ability to meet stringent compliance requirements around data access, user management, and breach containment.
3. Secure Your APIs
Fintech and regtech platforms often depend heavily on APIs for interoperability, especially with banks, government systems, or third-party vendors. Every exposed API is a potential attack surface. Ensure your APIs are:
Regular API penetration testing and version control can also help ensure these critical interfaces remain secure over time.
Handling sensitive data — financial records, personal identification, and transaction logs — comes with its own security mandates. Here are several must-have practices:
Encryption should be standard for data in transit and at rest. Use up-to-date, industry-approved algorithms (such as AES-256 or TLS 1.3). Avoid developing custom encryption schemes, which often fail under scrutiny.
Logging is essential for auditing and breach detection, but over-logging can create compliance risks. Sensitive information should never appear in logs.
Virtual data room software is increasingly used in regtech environments where secure document sharing and collaborative auditing are critical. These platforms enable role-based access, activity tracking, and encrypted file storage — ideal for due diligence, regulatory filings, or high-risk internal reviews.
By integrating virtual data room capabilities, developers can offer their applications a secure, auditable layer of document management that meets both security and compliance standards.
Modern DevOps pipelines must align with compliance and security from the ground up. Automating secure configurations and compliance validations within CI/CD workflows reduces manual errors and speeds up release cycles without sacrificing integrity. Key practices include:
DevSecOps goes further by embedding security testing into every stage of development and deployment, ensuring your product ships with compliance in mind.
Achieving compliance is not a one-time milestone; it requires continuous monitoring and adaptability. Regulatory standards change, attack methods evolve, and user behavior shifts. Your production environment must support:
Monitoring tools should also support compliance reporting formats so teams can quickly respond to inquiries or demonstrate adherence during audits.
The strongest security strategy will fail without an educated and vigilant development team. Empowering developers with secure coding practices and ongoing training helps create a culture where security is second nature. Invest in:
Security training must evolve alongside your application, especially as it scales or incorporates new regulatory territories.
Fintech and regtech are high-stakes industries. Regulators are watching, and so are your users. Secure development is no longer simply about preventing breaches; it’s about demonstrating a mature, compliance-oriented approach to software creation. By integrating security across the SDLC, leveraging tools like virtual data room software for sensitive operations, and staying ahead of regulatory shifts, developers can build trustworthy applications that meet the moment.
Whether you’re creating tools for digital banking, automated KYC, or real-time compliance monitoring, embedding these practices into your process will ensure not just a secure product, but a resilient and compliant business.
Author bio: Josh Duncan is Senior Vice President for Product Management at Donnelley Financial Solutions™ (DFIN) , a global financial solutions company headquartered in Chicago. He is responsible for software and technology solutions for Global Capital Markets including ActiveDisclosure, for financial and disclosure reporting, and Venue, the leading Virtual Data Room for mergers and acquisitions. Josh earned his Bachelor of Science in engineering from the University of Wisconsin and holds an MBA in marketing and finance from Kellogg School of Management at Northwestern University.
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