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PCI DSS: A Necessary Evil for Fintech Companies?

Posted by: MK CS Team
Category: PCI DSS

 A study by Singularity University reveals “About 46% of today’s consumers use digital channels exclusively for their banking”. Another study by Capgemini highlights “half of the banking customers globally are now using Fintech firms”. Such wide acceptance of Fintech Companies has got both government and investors interested. While the government is banking upon the Fintech Industry to promote a cashless economy, investors are searching for the potential of immense growth.

India and China will be competing to emerge as the biggest Fintech player in the coming decade, which guarantees a pool of new features and facilities by Fintech Companies. China now commands the biggest pool of Fintech Companies and payment based app users. With India in the second position, the competition is tough. While Fintech companies are battling it out by offering top-notch service, hackers are spoiling the effort through unauthorized access.

Must Read: Biggest Data Breaches in the History of Mankind [Infographic]

Top Security Challenges in Fintech Industry

Popular mobile-based payment apps from India, the US and China have disrupted the market. These platforms have changed the banking landscape in their respective regions but it was no cakewalk. Government regulations, social fright and wide adoption were some of the top challenges. While these Fintech Platforms were able to coax people into trying their payment features either by offering cashback and discounts but they are yet to get par with security challenges.

  • Tests have shown that 56% of the mobile app back ends have serious misconfigurations or privacy issues related to SSL/TLS.
  • 62% of the Fintech’s main website failed the Payment Card Industry Data Security Standard (PCI DSS) compliance test.
  • 64% of Fintech’s main website failed GDPR Compliance.

Also Read: What are Managed Security Services & How it Benefits Your Organization?

Top Security Challenges that Concerns Fintech Companies are:

  • DDoS Attack
  • Cross-Site Scripting
  • Sensitive Data Exposure
  • Security Misconfiguration
  • Vulnerability Management

Problems PCI DSS Compliance can solve: 

Payment Card Industry Data Security Standards are a set of regulations developed by players like MasterCard, Visa, and American Express. These electronic payment facilitators have developed a standard practice to be followed by all merchants, which makes online banking, and shopping safer.

When Fintech companies acquire the requisite compliance, they get to function under a safety blanket that promises protection against data theft, unauthorized access, and misuse. With PCI DSS, Fintech can not only safeguard data but also win customer’s trust.

Interesting Read: The Definitive Guide to PCI DSS Compliance

PCI DSS helps Fintech start-ups with the following: 

Well! PCI DSS is basic compliance that every site that receives or sends money online needs to comply with. Fintech Start-ups and enterprises should start their journey by getting all these compliances beforehand. Planning ahead with help start-ups getting the requisite clearances from the government faster.

1. Encryption: Fintech companies become compliant only when they encrypt all data. Encryption ensures that no data is transferred from one source to another without being converted into an undecipherable format. Such practice ensures that data is accessed only by people who are authorized.

Encryption works on a lock and key basis. The information is converted and locked at one source and can only be unlocked and read with the key at the receiver’s end. Such encryption ensures the proper safety of valuable information.

2. Sabotage attacks like DDoS and Security Misconfiguration: Since PCI DSS requires rigorous scrutiny of cyberinfrastructure, system configurations, and accessibility logs, it ends up cleaning the system against all kinds of misconfigurations and loopholes. PCI DSS ensures proper encryption, configurations, and logs, which reduces the chances of DDoS attacks and removes various security misconfiguration.

3. Restricts Cross-site Scripting: The motif of implementing PCI DSS is to ensure all information transmitted on a network is encrypted and safe from unauthorized access. With every iota of information being encrypted at source and deciphered only at the destination, the chances of cross-site scripting decreases. Companies who consider PCI DSS Compliance to be expensive should measure the additional advantages it offers.

4. Customer’s Confidence: In the recent past, we have witnessed the likes of Facebook and Yahoo succumbing to the terror of hackers. When the biggest players in tech are not safe, doubts are bound to creep into people’s minds. People from around the world are scared of losing their data and they are willing to shop only with companies that have the requisite compliances.

Must Read: Vulnerability Assessment: Everything You Should Know About

PCI DSS Certificate at the display on your site can turn out to be an important decision influencer. For Fintech Startups that are new and are willing to acquire new customers, using PCI DSS Certification as a marketing prop can prove to be beneficial.

5. Proper Logging at Data Storage Centers: The good thing about PCI DSS is that it not only protects user data from hackers but also from people who are working at Fintech companies. PCI DSS certificates are given to enterprises that follow a set of regulation and these regulations ensure that no employee at Fintech can access these data.

It is compulsory for all Fintech with PCI DSS Certification to maintain logs of employees who access user data, which ensures 100% accountability and safeguards data from internal misuse. Such intricate and reliable standards of PCI DSS have made it tough for hackers to access user data. Also, these requirements make it tough for Fintech companies to acquire the requisite certification.

6. PCI DSS Develops Base for Other Compliances: Fintech Companies can aim for PCI DSS compliance and become eligible for other compliances like GDPR, HIPPA and many others automatically. PCI DSS’s requirement list is bigger and contains 12 different standards to be followed, complying with all of them prepares the company for other certifications.

Fintech companies need to comply with a set of standards depending upon the country they are functioning in. They must comply with all of these to avoid fines and data breaches.

Also Read: An Introduction to Information Security Risk Assessment

There are 12 PCI DSS Compliant requirements and they are: 

  1. Protect your system with Firewall
  2. Protect stored Cardholder Data
  3. Maintain a Vulnerability Management Program
  4. Restrict Access to Cardholder Data by Business-need-to-know
  5. Implement Logging and Log Management
  6. Use Authentic Anti-virus and not Vendor Supplied Tools
  7. Encrypt transmission of Cardholder Data across all channels
  8. Assign Unique ID to Every Authorized Personnel
  9. Regularly Update and Patch System
  10. Conduct Vulnerability Scans and Penetration Testing
  11. Documentation and Risk Assessments
  12. Restrict Physical Access to Workplace and Cardholder Data

Read More about PCI DSS requirements and benefits

Conclusion:

With hackers preying Fintech companies, it is risky for these companies to function without PCI DSS Compliance. Also failing to comply with PCI DSS standards will invite hefty fines. While getting PCI DSS Compliant can be tough, it requires investment and efforts but failing it can jeopardize the future.

In modern times, where data is so important, it is important that all standards are followed and data is protected against unwanted access and data breaches. Since complying with PCI DSS makes it easier for the companies to acquire other certifications, it is no less than a cheat sheet to secure the banking environment.

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