Fintech obligations arrive from three directions at once. Regulators impose rules that depend on your license and the products you offer. Card networks impose PCI DSS through your acquirer or processor. And the banks, enterprise customers, and investors you depend on impose their own diligence, which is often stricter than the law. A workable program treats these as overlapping demands on one set of controls rather than as separate projects run by separate people.
Regimes a fintech is likely to meet
Not every row applies to every fintech. A B2B payments API that touches card data needs PCI DSS and probably SOC 2. A lending platform under FTC jurisdiction needs a Safeguards Rule program. A payroll or reconciliation product that feeds customers' ledgers will be asked for SOC 1. Map your products, licenses, and data flows first, then pick the rows. State licensing regimes, such as New York's DFS cybersecurity regulation for licensed entities, can add further requirements.
SOC 1 or SOC 2: which report do customers need?
The deciding question is who reads the report and why. If your customers' external auditors need to rely on your processing to sign off on their financial statements, for example because you calculate interest, move funds, or produce ledger entries, they need a SOC 1. If customers are assessing whether you protect their data and keep the service available, they need a SOC 2. Many fintechs end up with both, and the IT general controls tested in each overlap heavily. See SOC 2 compliance for how the criteria are structured.
What the Safeguards Rule requires in practice
- Designate a qualified individual to oversee the program, who may be an employee or a service provider you supervise.
- Base safeguards on a written risk assessment that sets criteria for evaluating risks and is updated periodically.
- Implement access controls, a data inventory, encryption of customer information in transit and at rest, and multi-factor authentication for anyone accessing information systems.
- Run annual penetration testing and vulnerability assessments every six months, unless you have effective continuous monitoring.
- Oversee service providers, train staff, maintain a written incident response plan, and have the qualified individual report to the board at least annually.
- Notify the FTC as soon as possible, and no later than 30 days after discovery, of a notification event involving unencrypted information of at least 500 consumers.
What a sponsor bank will ask for
Typical bank partner diligence package
- Information security policy set, approved and dated, with evidence of annual review
- Most recent SOC 2 report or ISO 27001 certificate, plus any PCI DSS attestation of compliance
- Risk assessment and a current risk register with treatment owners
- Your own vendor management program, since the bank inherits your fourth parties
- Business continuity and incident response plans, with test results
- Penetration test summary and remediation status of findings
- Complaint handling, compliance management, and BSA/AML procedures where relevant to the product
A sensible order of work
- Reduce PCI scope before you document it. Tokenization or a hosted payment flow can remove most systems from scope. See PCI DSS compliance.
- Stand up the core security program that GLBA, bank partners, and SOC 2 all expect: risk assessment, access control, MFA, encryption, logging, incident response.
- Get a SOC 2 Type I, then start the Type II period, adding SOC 1 if customers' auditors ask for it.
- Build vendor oversight early, since banks and regulators both look through you to your providers.
- Add ISO 27001 when you expand internationally or enterprise buyers request it.
Mistakes that surface during diligence
- Assuming a processor's PCI compliance covers you. It covers their environment, not your integration or your staff.
- Letting the SOC 2 scope exclude the money-movement systems a bank partner actually cares about.
- Running separate spreadsheets for PCI, SOC 2, and bank questionnaires that describe the same control three different ways.
- Having no named owner for the Safeguards Rule annual board report.
Running it as one program in Asurvo
Asurvo covers PCI DSS 4.0.1, SOC 2, ISO 27001, GDPR, and CCPA/CPRA in one workspace, with automated cross-mapping so a single access review or encryption control counts everywhere it applies. The Third Party module handles vendor inventory, tiering, and questionnaires, and the Audit module gives external auditors their own workspace for requests and findings.