In recent years there has an increasing demand from consumers for more accessible and more convenient banking and financial services. This has seen a rise in the number of FinTech (financial technology) start-ups and established financial services firms adapting to technological advances.
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When it comes to hosting options though, many firms were initially reluctant to move their operations to the cloud or allow a third-party provider to manage their hosting services for them. This is primarily due to them having hosting needs that can be unique to their sector. It may also be because of the heavy regulation that they face in the industry from the Financial Conduct Authority and they had misconceptions about security in the cloud. However, the FCA has recently stated that they encourage firms to take advantage of the cloud and the opportunities that it provides and stated they see “no fundamental reason why cloud services (including public cloud services) cannot be implemented.”
Below we assess the hosting needs of FinTech businesses:
All businesses require security with their hosting but when it comes to the FinTech industry, this is imperative. Financial firms can often deal with highly sensitive data and a breach could put their customer’s financial wellbeing in jeopardy as well as ruin the reputation of their business. When it comes to hacking and cyber-attacks, the FinTech industry is a favourite target and they therefore cannot afford to be complacent. FinTech firms therefore need to ensure that their data is protected by building infrastructures that secure data at all times and also ensure compliance.
When it comes to finding a hosting provider, FinTech firms seek a partner who can provide economies of scale with established and vigorous security capabilities and has the resources and expertise to deal with security threats.
At Veber, we appreciate that they therefore may be hesitant in entrusting a hosting provider with confidential information but we can offer assurances that any partnership with us will only benefit your business, by supporting your key operations in the cloud. Our hosting services have two factor authentication for users to enhance security and we have rigorous vulnerability and incident management protocols.
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The financial services industry is one of the most highly regulated in the world and this means that they have certain unique requirements when it comes to compliance. Compliance has sometimes been an obstacle to adopting cloud hosting services that otherwise would have strengthened their business. Thankfully, this notion has changed and financial regulators, such as the aforementioned FCA in the UK, are recognising the value, acceptance and increasing adoption of cloud hosting. This has seen them develop guidelines to reassure FinTech companies when it comes to compliance.
The reality is, security and compliance can actually improve with cloud migration. As data protection is essentially our livelihood at Veber, we offer a standard of security that can often far surpass the on-premise systems of a business. With some forward planning, financial services firms can enjoy better security for their applications and data in the public or private cloud and create a more robust IT infrastructure.
All businesses have storage requirements but it can be difficult to plan your requirements in the FinTech industry with increasing data growth and ever-changing data retention regulations. For example, the “Markets in Financial Instruments Directive – Part Two” (MiFID II) will be enforced by the EU in 2018 and will require financial firms to make changes and controls on a wide range of topics that will see a steep rise in the amount of data that they will need to securely store.
Managing storage on-premises can cause FinTech businesses to risk not having enough capacity or see them having to maintain expensive storage capabilities that aren’t required. This means that they require hosting that gives scalable, robust storage options.
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As FinTech firms manage such highly-sensitive customer data and have business-critical applications, having solid back up procedures and a disaster recovery plan takes on a new impetus. Data loss can ruin a FinTech company, with customers less likely to forgive a loss or breach of their financial information and this can destroy the firm’s reputation and any trust they have built.
Therefore, FinTech firms need to choose a hosting provider who can help implement procedures on backing up data, creating disaster recovery solutions and introducing a business continuity plan that can manage the effects of an emergency or disruption to its business operations and ensure its critical business functions are protected.
The FinTech industry is an environment where data security, compliance and business continuity are essential requirements and many firms have found that the best way to meet these criteria is to use a cloud provider.
At Veber, we have proven compliance expertise and have worked with several financial businesses who come to us for our high levels of availability, performance and flexibility. The FinTech industry has unique requirements and we offer a more consultative approach, working together with you to provide a tailored service to help you meet your needs.
We know firms cannot afford for financial information to be leaked and businesses need a provider who meets their compliance needs, provides scalability for business growth and has dependable SLAs.
If you would like to know more about our approach FinTech compliance and how we could help your business, please get in touch with one of our experts today.
For more information on Fintech unique hosting needs read our whitepaper on the subject.
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