INDUSTRY FACT FILE · FINTECH

Cybersecurity FAQs for Fintech Companies

Forty frequently asked questions and answers in five categories, written for founders, CXOs, CISOs, engineering, risk and compliance teams in fintech companies.

In this document 1.  Category 1: Cyber risk, governance and strategy 2.  Category 2: Regulation, partners and compliance 3.  Category 3: APIs, applications and DevSecOps 4.  Category 4: Fraud, SOC and incident response 5.  Category 5: Cloud, privacy, third parties and AI

Audience: Founders, CEO, CTO, CISO, Board members

Q1. Why does cybersecurity matter so much for fintechs?

Fintechs hold sensitive financial and identity data on API-driven cloud platforms connected to many partners. Banks, NBFCs, investors and enterprise customers will not integrate or invest without evidence of strong security, and licensed fintechs face direct RBI obligations. A single incident can end partnerships.

Q2. What are the biggest cyber risks for fintechs?

Broken API authorisation, excessive data exposure, leaked keys and secrets, cloud misconfiguration, insecure webhooks, account takeover, synthetic identity and deepfake onboarding, consent misuse, malicious SDKs, supply-chain compromise and weak logging are the most consequential.

Q3. Are fintechs directly regulated for cybersecurity?

It depends on the model. Licensed entities such as NBFC-Account Aggregators and NBFC-P2P platforms are covered by RBI's 2026 NBFC cybersecurity Directions. Partner-led fintechs inherit requirements from their bank and NBFC partners' obligations. CERT-In's Directions and the DPDP framework apply broadly.

Q4. When should a fintech appoint a CISO?

As soon as it handles customer financial data at scale or works with regulated partners. Licensed NBFCs in the Middle Layer and above must have a CISO under RBI's 2026 Directions; for others, a full-time or virtual CISO helps meet partner expectations and own the security roadmap.

Q5. How should security be reported to the Board and investors?

Report risk in business terms: critical findings and their age, testing coverage of APIs and apps, cloud posture, incidents and root causes, partner audit outcomes and progress against the roadmap.

Q6. How much should a fintech spend on security?

There is no fixed percentage. Prioritise the controls that prevent common, high-impact failures—API authorisation, secrets, cloud configuration and onboarding fraud—then build monitoring and response. Managed services help growth-stage companies get 24x7 coverage.

Q7. What do the fintech SROs mean for security?

RBI recognised FACE as the first Self-Regulatory Organisation for fintech in August 2024 and Sahamati as the SRO for the Account Aggregator ecosystem in June 2026. SRO codes of conduct and standards are becoming part of what partners and regulators expect of members.

Q8. How can Codec Networks help a fintech?

Codec Networks provides API and application security, cloud assessments, DevSecOps, third-party risk management, fraud and deepfake simulations, regulatory readiness, ISO 27001 and SOC 2 readiness, managed SOC and incident response—with partner-ready reporting.

Audience: Compliance, partnerships and legal teams

Q9. How do the Digital Lending Directions affect lending technology firms?

The RBI (Digital Lending) Directions, 2025 keep banks and NBFCs accountable for their lending service providers and digital lending apps, require DLAs to be reported on RBI's CIMS portal, and restrict how borrower data is collected, stored and shared. Lenders therefore audit LSPs' security and data practices.

Q10. Which cyber requirements apply to Account Aggregators and P2P platforms?

NBFC-AAs and NBFC-P2Ps are NBFCs, so RBI's 2026 NBFC cybersecurity Directions apply. Under scale-based regulation they sit in the Base Layer, so requirements depend mainly on asset size: Chapter III below ₹500 crore and Chapter IV (including IT governance and annual IS audit) at ₹500 crore and above.

Q11. What do bank and NBFC partners usually ask for?

Typically: recent VAPT reports with retests, cloud security evidence, ISO 27001 or SOC 2 status, policies, incident-response and breach-notification commitments, data-handling and retention practices, sub-processor lists and audit rights.

Q12. Do partners' 2026 cybersecurity Directions affect us?

Yes. RBI's July 2026 Directions for banks and NBFCs require audit and RBI access rights in IT and cyber third-party arrangements and oversight of vendors. Those requirements flow into fintech partner contracts and audits.

Q13. What does CERT-In require of fintechs?

Covered entities must report specified incidents within six hours of noticing them, maintain ICT logs for a rolling 180 days within India, synchronise clocks with NIC or NPL time servers and designate a point of contact.

Q14. Do we need ISO 27001 or SOC 2?

Neither is mandated by RBI for most fintechs, but both are widely requested by partners and enterprise customers. ISO 27001 is common in India; SOC 2 is often requested by international clients and investors.

Q15. Does PCI DSS apply to fintechs?

Only if the fintech stores, processes or transmits cardholder data or can affect its security—for example card-issuing or BaaS card programmes. A scoping assessment confirms what is in scope.

Q16. Can Codec Networks act as an independent auditor?

Yes. Codec Networks is CERT-In empanelled for information security auditing services and performs independent VAPT, IS audits and applicability assessments, confirming independence in each proposal.

Audience: CTOs, engineering leads and application security teams

Q17. What should API security testing cover?

Authentication, object- and function-level authorisation, data exposure, rate limiting, input validation, business logic, webhooks and callbacks, and secrets handling—using the OWASP API Security Top 10 as a baseline.

Q18. How do we secure webhooks?

Sign payloads, verify signatures, use timestamps or nonces to prevent replay, restrict source addresses where possible, validate payloads against expected state and alert on unusual callback patterns.

Q19. How often should we test?

Run automated testing on every build, targeted testing on significant releases and expert penetration testing at least periodically and before major partner go-lives. Licensed NBFCs in higher layers must also meet the frequencies in RBI's 2026 Directions.

Q20. What is DevSecOps in practice?

Security built into the pipeline: SAST, DAST and software composition analysis, secrets scanning, infrastructure-as-code checks, signed builds and policy gates—plus developer training and threat modelling for new features.

Q21. How should we manage SDKs and open-source libraries?

Maintain an SBOM, review SDKs before adoption, pin and verify versions, scan for vulnerabilities continuously, restrict SDK permissions and monitor outbound traffic from apps.

Q22. How do we protect secrets?

Never store secrets in code or apps; use a vault, short-lived credentials and automated rotation; scan repositories and pipelines; and alert on any leak.

Q23. What does a secure mobile fintech app need?

Secure storage, certificate pinning, root and jailbreak detection, tampering resistance, secure session handling, device binding where appropriate and secure backend APIs. OWASP MASVS is a useful baseline.

Q24. How do we test business logic?

Model how features can be abused—limits, retries, rewards, referral schemes, loan workflows—and test those paths deliberately with authenticated users and partners, not just scanners.

Audience: Risk, fraud, security operations and incident response teams

Q25. How do fraudsters beat digital onboarding?

With synthetic or stolen identities, forged documents, AI-generated faces and video-injection attacks against liveness checks, often at scale and coordinated across devices.

Q26. How can we test onboarding against deepfakes?

Run controlled simulations with synthetic faces, replayed and injected video and forged documents against the live onboarding flow, and measure detection by liveness, device attestation and analytics.

Q27. Do fintechs need a 24x7 SOC?

Any fintech handling customer financial data at scale benefits from 24x7 monitoring, and CERT-In's 6-hour reporting window is hard to meet without it. Managed SOC services make this practical for growth-stage companies.

Q28. What should a fintech SOC monitor?

Cloud audit logs, API gateway logs, authentication events, privileged and support access, data exports, SDK and outbound traffic anomalies and fraud signals such as device reuse and velocity.

Q29. What should our incident response plan include?

Classification, roles, escalation, containment, evidence preservation, communication with partners and customers, and the workflow for CERT-In (and, for licensed NBFCs, RBI) reporting within six hours.

Q30. How long must logs be kept?

CERT-In requires ICT logs to be maintained for a rolling 180 days within Indian jurisdiction. Partners may require longer retention by contract.

Q31. When should we call in forensic help?

As soon as a material compromise or data leak is suspected—especially in cloud environments, where evidence can disappear quickly.

Q32. How do we handle a leaked credential?

Revoke and rotate immediately, investigate access made with it, check for persistence, assess data exposure, decide on reporting obligations within the 6-hour window and fix the root cause.

Audience: Cloud and platform teams, data protection leads, vendor management, product teams

Q33. What are the most common cloud security failures?

Public storage, over-privileged IAM roles, long-lived keys, missing encryption, exposed management interfaces, untracked environments and incomplete logging.

Q34. How should a fintech secure Kubernetes?

Harden clusters, restrict privileges and network policies, scan images, manage secrets externally, enforce admission policies and monitor runtime behaviour.

Q35. When do DPDP obligations apply?

The DPDP Rules, 2025 were notified on 13 November 2025 with phased commencement; most data-fiduciary obligations, including safeguards and breach intimation, take effect in May 2027.

Q36. How should Account Aggregator data be handled?

Request only the data and duration needed for a clear purpose, protect it with strong encryption and access controls, restrict vendor access and delete it when the purpose ends.

Q37. What should a fintech's vendor risk programme include?

Classification by criticality and data access, due diligence, contractual security and breach-notification terms, periodic evidence reviews and monitoring of high-risk vendors and SDKs.

Q38. What are the security risks of AI features?

Prompt injection, leakage of personal or confidential data, unsafe tool use by AI agents, model manipulation and unreliable decisions. AI features should be threat-modelled and tested like any other critical component.

Q39. Is ISO 42001 relevant to fintechs?

ISO/IEC 42001 provides a management-system standard for AI. Fintechs using AI in credit, fraud or customer service can use it to structure AI governance and demonstrate responsible AI to partners.

Q40. How can a fintech start with Codec Networks?

Begin with a scoping call on your product, partners, cloud stack and deadlines. Codec Networks will typically propose a pre-launch or partner-ready VAPT, a cloud review and a readiness roadmap.

Contact Codec Networks Pvt. Ltd. New Delhi: 507, 5th Floor, New Delhi House, Barakhamba Road, Connaught Place, New Delhi – 110001 Gurugram: 707, 7th Floor, Silverton Tower, Golf Course Extension Road, Sector 50, Gurugram – 122018, Haryana Landline: 011 430 496 96 | 011 437 522 99   Mobile: +91 99716 76124 | +91 88007 88220 | +91 88003 31124 Email: mktg@codecnetworks.com   Web: www.codecnetworks.com

Note: These FAQs provide general guidance as of October 2026 and do not constitute legal or regulatory advice. Obligations depend on each company's licence, partner arrangements and activities; confirm against current official instruments issued by RBI, CERT-In and MeitY.