Just like top tennis players, data constantly travels from one place to another. That’s why measures must be implemented to ensure it is always transmitted securely.

When it comes to banking data, protection becomes even more critical. And in the realm of Open Banking—where data sharing and third-party access are promoted—security must be heightened further.

This is why banks and financial institutions need to know how to recognize a secure Fintech.

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Ethical Hacking

When we hear the word 'hackers,' we often go on the defensive, since in cybersecurity they can exploit company vulnerabilities.

However, there are also hackers who help financial institutions conduct preventive and reactive security analyses to safeguard their data. These IT specialists are known as 'ethical hackers.'

Also referred to as 'white hats,' these experts are authorized by Fintechs, banks, or other organizations to access their systems as if they were real cyber attackers. Some of the tests they perform include:

• Searching for malicious code
• Testing open ports and Wi-Fi networks
• HTTP attack simulations
• Code and validation error checks
• Cloud infrastructure reviews
• API analysis

The benefits of this technological procedure are many. For example, it helps detect software gaps, improve firewalls and honeypots, track sensitive data, train teams on best practices, and ultimately optimize processes to become a trusted financial partner.

As we can see, Ethical Hacking is crucial for safeguarding the integrity, confidentiality, and availability of a Fintech’s applications. When evaluating a safe provider in the Open Banking ecosystem, check whether they’ve recently undergone ethical hacking assessments—typically required at least every three months.

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ISO Certification

Another important factor is the security certifications of financial institutions. Specifically, ISO 27001, an international standard issued by the International Organization for Standardization (ISO).

In today’s increasingly global and digital world, it’s vital for companies to manage information with the highest security standards. ISO 27001 focuses on these key pillars:

• Information is only accessible and modifiable by authorized users
• A framework of processes, people, and technologies is in place to assess potential risks
• A continuous improvement cycle and information security control system are established
• Certification is renewed regularly to maintain and improve security controls

At Floid, we work with Hackmetrix on our ISO 27001 certification to ensure our systems and processes are responsible—an essential aspect of Open Banking and Open Finance where client and company data is shared.

To recognize a secure Fintech, check their implementation and compliance with ISO 27001 for effective protection of your information assets.

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Official Agreements

In Europe, where Open Banking and Open Finance regulations are more robust, institutions can provide official APIs for businesses and individuals to share data with third parties.

In Chile, the Fintech law currently in Congress aims in this direction, while Colombia is advancing its Open Banking regulations.

Currently, one way to implement Open Banking in Latin America is through official agreements with institutions. For example, BancoEstado in Chile may authorize a Fintech to access its systems to retrieve and share data—benefiting all parties involved. From the bank’s perspective, having access to other institutions’ customer financial histories can help them offer a mortgage, for instance.

When a Fintech establishes official agreements with financial ecosystem entities, it positions itself as a secure provider for banks.

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Encryption Technologies

When discussing security policies, message encryption is synonymous with trust, as it adds an extra layer of protection to data in transit to prevent cybercriminals from accessing confidential information.

End-to-end encryption is a basic security feature for Fintechs. Without it, it’s like sending a letter without an envelope—anyone can read the content and act maliciously. In the banking ecosystem, this can lead to fraud, malware, and other system breaches.

At Floid, user-shared information is encrypted using an algorithm, ensuring its security throughout the process. Specifically, we use AES-256 encryption—the same standard used by governments and banks worldwide.

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Data Protection Laws

It’s important to mention that Chile has had Law No. 19.628 for personal data protection since 1999. Peru protects this fundamental right through Law No. 29.733, and Colombia through Law No. 1581.

Although these legal frameworks may fall short in a rapidly digitizing world moving toward Open Banking and Open Finance, Fintech laws are expected to strengthen them.

To recognize a secure Fintech, verify whether they consistently comply with data protection and consumer laws, so you can assure your users that their information is safe with you.

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How We Do It at Floid

We are convinced that financial inclusion in Latin America will continue to grow. That’s why we are preparing with the implementation of various policies that anticipate legislative standards being proposed in the Fintech laws of Chile, Colombia, Peru, and Mexico.

We have followed European regulations as a model for advancing in cybersecurity. This is why we perform constant Ethical Hacking tests (as required by major banks), work toward ISO 27001 certification, and establish official agreements with banks to ensure authorized connections.

With our Open Banking technology, your clients can share their financial information knowing their data is safe and protected.

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