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Building for Compliance: Secure Development Practices for Fintech and Regtech Applications

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.

Why Security Is Integral to Compliance in Fintech and Regtech

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.

Core Secure Development Principles for Regulated Applications

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:

Performing threat modeling during the design phase
Identifying sensitive data flows and potential attack vectors upfront
Defining security requirements alongside functional ones

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:

Strong identity verification: Multifactor authentication (MFA) and role-based access controls (RBAC)
Least privilege enforcement: Users and services should only have the access they need
Continuous monitoring: Real-time evaluation of access requests and data interactions

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:

Protected via OAuth 2.0 or similar authorization frameworks
Designed with rate limiting, input validation, and schema enforcement
Logged and monitored for unusual activity

Regular API penetration testing and version control can also help ensure these critical interfaces remain secure over time.

Data Handling and Storage Best Practices

Handling sensitive data — financial records, personal identification, and transaction logs — comes with its own security mandates. Here are several must-have practices:

Encrypt Everything

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.

Data at rest: Store encrypted data using secure key management systems (KMS)
Data in transit: Enforce HTTPS/TLS across all communication channels
Database security: Leverage column-level encryption for personally identifiable information (PII) and financial details

Log Intelligently, Not Excessively

Logging is essential for auditing and breach detection, but over-logging can create compliance risks. Sensitive information should never appear in logs.

Mask or exclude credentials, tokens, or financial details
Encrypt log storage and restrict log access
Implement centralized logging solutions for audit trails

Employ Virtual Data Room Software for Critical Data Exchanges

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.

Compliance-Aware Deployment and DevOps

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:

Infrastructure as Code (IaC): Enforce secure configurations for servers, databases, and networks from version-controlled scripts
Container Security: Use trusted images, perform regular vulnerability scans, and isolate environments using Kubernetes or similar platforms
Automated Compliance Checks: Integrate tools like OpenSCAP, Chef InSpec, or custom scripts to validate configurations against compliance benchmarks such as PCI-DSS or ISO/IEC 27001

DevSecOps goes further by embedding security testing into every stage of development and deployment, ensuring your product ships with compliance in mind.

Continuous Compliance: Auditing and Monitoring in Production

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:

Real-time alerting for anomalies: Implement behavior analytics and rule-based alerts
Audit trail generation: Capture user actions, configuration changes, and data access logs
Regular third-party audits: External validation not only ensures compliance but builds trust with clients and partners

Monitoring tools should also support compliance reporting formats so teams can quickly respond to inquiries or demonstrate adherence during audits.

Empowering Teams Through Secure Culture and Training

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:

Secure coding certifications or workshops (e.g., OWASP Top 10)
Access to vulnerability databases and patch notes
Code review protocols with a security lens
Red/blue team exercises for security response readiness

Security training must evolve alongside your application, especially as it scales or incorporates new regulatory territories.

Building Toward Compliance as a Competitive Edge

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.

Beyond Compliance: Building a Security-First Culture in Your Development Team

Security isn’t something to tackle at the end of a development cycle. If you only check boxes to satisfy compliance requirements, you’re missing the bigger picture. Regulations set a baseline, but today’s threats are far more sophisticated than what compliance alone can protect against. While compliance frameworks can help guide your security efforts, they aren’t built to handle the constant shifts in technology and threats.

In this post, we’ll explore how to build that kind of culture, from shifting your team’s mindset to embedding practical security measures, so you can confidently ship and stay ahead of the threats that compliance checklists often miss.

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Shifting the Mindset: Why Security Should Be a Core Development Principle

Security should never be an afterthought. When it is, critical issues are often missed or ignored, especially under pressure. Instead, it needs to be woven into every stage of the workflow, from architecture planning to CI/CD pipelines.

A single overlooked vulnerability can spiral into a breach affecting thousands. Adopting a security-first mindset means reducing the number of those vulnerabilities before they have a chance to exist. You’re not waiting for the security team to catch issues later. Your devs are spotting them in real time.

Companies that take this seriously are seeing actual results. Look at some of the major players in the fintech and healthcare industries that can’t afford to be reactive. They’ve built processes where security is part of their engineering DNA. That mindset allows them to scale quickly without compromising trust.

It’s especially critical when you consider the constantly shifting landscape of cyber threats and regulatory changes like AI and cloud security risks. A security-first culture makes it easier to adapt without derailing your entire roadmap. When teams are used to thinking proactively, reacting to new threats becomes just another sprint task, not a fire drill.

Establishing Regular Security Policy Reviews and Updates

Security policies will evolve with your tech stack, threat landscape, and team structure. If your policies haven’t been touched in months, there’s a good chance they’re missing crucial updates.

Outdated security guidelines can lull teams into a false sense of safety. Worse, they can introduce blind spots that attackers love to exploit. Take the time to assess your policies on a regular schedule. That could mean whatever fits your team’s cadence every quarter or after a significant release.

Compliance is only one piece of the puzzle; protecting the integrity of your workflow is equally essential. That requires regularly updating your organization’s security policies to minimize the risk of breaches such as cyberattacks. This becomes especially critical during periods of change, like company mergers or the shift to remote work. Use these moments as strategic checkpoints to reinforce your team’s shared commitment to security.

Implementing Effective Risk Assessments in the Development Lifecycle

Developers can and should be involved in identifying vulnerabilities early. When assessments happen throughout the dev cycle, especially in agile or DevOps workflows, you catch more problems before they ship. Start with a straightforward process, such as conducting an effective cybersecurity risk assessment. This involves identifying assets, evaluating vulnerabilities, and developing a risk mitigation plan.

Promote a culture where your team consistently logs risks in tickets, documents security concerns during code reviews, and revisits them during retrospectives. These small practices build lasting habits, making security as routine as testing or linting.

Stay alert for common red flags, such as hardcoded credentials, outdated third-party dependencies, and ambiguous authentication flows. These are frequent targets for bad actors, and developing an eye for these vulnerabilities puts your team a step ahead.

Training and Best Practices: Empowering Developers to Prioritize Security

Security training should be built into your dev culture through ongoing education. Set up lunch-and-learns, bring in guest experts, or budget time each quarter for hands-on labs. Developers need training that speaks their language, framework-specific tips, real-world attack scenarios, and concrete steps to write safer code. Think less about theory and more about how this helps build better products.

Peer code reviews are one of your strongest lines of defense. Pairing devs to review one another’s pull requests keeps fresh eyes on the code and gives everyone a shot at spotting risky patterns. Layer in automated tools that scan for secrets, outdated packages, or config issues, and you’ve got a strong baseline.

Online security best practices, like proper key management and encryption, provide a strong foundation for protecting your organization. Encourage your team to bookmark trusted resources and create customized checklists tailored to their specific projects and workflows.

Over time, these practices become second nature. You’ll start to hear security questions come up in sprint planning. You’ll see engineers sharing OWASP articles in Slack. That’s the kind of culture that builds real resilience.

Conclusion

Everything changes by moving beyond compliance and embedding security into your development DNA. You spot issues faster, ship with confidence, and sleep better knowing your product isn’t full of ticking time bombs. Start by reviewing policies, investing in training, and making security a shared responsibility. The more you integrate these values into your daily workflow, the stronger and safer your software becomes. As a tech leader, it’s your job to set that tone. Invite curiosity, empower your team, and build a culture that treats security as a cornerstone, not a chore.