Best Practices to Develop Legally Compliant Financial Software

Non-Compliance Risks and How We Mitigate Them

Financial software is among the major targets for cyber criminals due to the nature of transactions it processes and the vast amounts of sensitive data it stores. Since non-compliance is penalized heavily (an entity may lose up to 4% of annual revenue), companies need to ensure their financial servicing software and security procedures fully adhere to the regulatory framework.


		In ScienceSoft’s financial software development projects, we care for compliant solution design, establish a secure development environment, and perform rigorous compliance testing before the software launch. We also advise on compliance cost optimization for financial solutions and can take over ongoing compliance maintenance.

How We Tackle Major Challenges of Financial Software Compliance

Challenge	How we address it
Non-compliant software design Financial app development companies may overlook important financial data protection standards or disregard them overall. Whether due to the lack of experience or the intent to speed up software implementation, this results in non-compliant functional, architectural, UX and UI design, leading to risks of non-compliant servicing operations.	Early identification of compliance requirements Early in a project, our compliance consultants with 7–20 years of experience elicit complete regulatory requirements for a financial solution. The team further translates them into specific functional and non-functional requirements. It helps ensure compliant solution design from the onset and prevents costly modifications along the way.
Missing region-specific regulations Financial software vendors usually provide compliance with widespread standards and regulations like PCI DSS and GDPR. But what about region-specific requirements? Financial compliance frameworks vary across different states and countries, and if your solution targets multi-regional users, you need to ensure its smooth adherence to versatile local rules, which, in reality, few vendors offer.	Focus on local frameworks We completed over 3,600 projects for clients from 75+ countries and have practical experience with a wide range of region-specific standards and regulations, from GLBA to CBUAE guidelines. If you’re entering an emerging market, we go the extra mile to investigate its financial regulations and help determine the compliance requirements to address to prevent legal risks.
Changing legal requirements Regulatory requirements evolve rapidly, and once you achieve compliance with the relevant regulations, you need to keep an eye on their updates and tune your solution accordingly. Legislative changes may even occur during development, and a vendor must be able to adapt promptly.	Fast response to changes Our compliance experts monitor the latest financial standards and immediately notify the development team about changes. With a detailed risk mitigation plan prepared early on, we address potential compliance gaps quickly and cost-effectively. We also assist with after-launch compliance maintenance to ensure your financial solution always operates as regulators require.

Examples of Financial Software Standards and Regulations We Help Adhere To

PCI DSS

When creating payment software, we adhere to PCI SSF guidelines to help businesses accepting card payments, payment service companies, and payment software providers ensure PCI-DSS-compliant cardholder and transactional data protection.

SEC Regulation SCI

We develop secure, resilient, highly available, low-latency trading and investment management systems to help financial companies operating the US securities markets ensure safe and smooth investment activities.

AML/CFT and OFAC SCP

We help companies operating globally design and implement software supporting a Customer Identification Program (CIP) and Customer Due Diligence (CDD) to prevent illegitimate access to financial services and eliminate criminal transactions.

GLBA

We establish powerful application and network security mechanisms to help US-based lending, investment, and insurance service providers safeguard sensitive customer data and prevent unauthorized manipulations of financial information.

SOX

For publicly traded financial service companies operating in the US, we implement automated control over the preparation and quality of financial reports and help establish financial data protection using encryption, role-based access control, and other protective measures.

CCPA

For financial businesses operating in California and monetizing customer data, we establish robust data protection mechanisms and CCPA-compliant functionality to enable safe access to consumer information for customers and regulators.

NYDFS Cybersecurity Regulation

We help BFSI companies operating in New York State and third-party vendors servicing these organizations build new solutions and improve currently used software to fully comply with the NYDFS requirements.

GDPR

We devise GDPR-compliant data management policies and implement robust security features for companies operating in the EU to protect customers’ financial data from breaches and employee misuse.

PSD2

We help EU-focused payment service providers build secure APIs to safely exchange customer data with other BFSI companies. We also implement advanced payer authentication and fraud detection mechanisms.

SAMA Cyber Security Framework

We help financial institutions operating in the KSA design software compliant with SAMA rules and implement robust app infrastructure protection mechanisms to improve business resilience against cyber threats.

How ScienceSoft Ensures Financial Software Compliance at Each SDLC Stage

We keep an eye on compliance throughout the entire financial software development journey – from requirements gathering to release. Here are the main steps of ScienceSoft’s compliance-centered development process:

Requirements engineering

At this stage, we elicit and document legal requirements for the financial solution, laying the basis for compliant technical design.

Determining global, region- and domain-specific compliance requirements.
Identifying the compliance scope, i.e., financial software components that must operate in accordance with regulatory rules.
Cross-checking legal vs. business requirements, suggesting the optimal ways to address contradictions, if any.
Prioritizing compliance features for implementation (bound to the general feature delivery sequence).

Financial software design

At this stage, we integrate compliance into all technical aspects of the financial solution and provide:

A compliant architecture often implying partitioning and containerization to secure the solution’s sensitive components.
Functional specification, e.g., geography-based KYC/AML verification, full audit trail of financial data manipulations, event-driven regulatory reporting, AI-based fraud prevention, etc.
Compliant integration design (APIs, custom connectors, etc.).
UX and UI design taking into consideration relevant compliance and security measures like multi-factor authentication, user session timeout, etc.
A compliant tech stack for financial software (e.g., choosing compliant cloud services like AWS for PCI DSS).

Project planning

Here, we lay the basis for the risk-free development of a compliant financial solution.

Scoping compliance-related tasks across the SDLC (e.g., verifying code and integration compliance) and defining the responsible parties.
Deciding on the development methodology to accommodate potential regulatory changes at later project stages.
Estimating compliance cost in the context of an overall project budget.
Identifying compliance risks and introducing a detailed compliance risk mitigation plan.

Development of financial software

Our key activities at this stage are:

Setting a secure development environment, implementing zero-trust access to code repositories.
Coding the solution’s back-end and creating user interfaces using secure coding practices (relying on standards like Application Security Verification Standard Project by OWASP).
Setting compliant financial data storage.
Compliance testing in parallel with development (may involve dynamic/static code reviews, functional testing, penetration testing, usability and accessibility testing, and more).

Pre-launch assessment and deployment

At this stage, we verify compliance, finalize infrastructure configurations, and set the ready-to-use solution live.

Revising financial software compliance risks, addressing new risks, and updating the risk mitigation plan.
Delivering exhaustive software documentation to facilitate compliance audits.
Setting and configuring the financial app infrastructure, implementing compliance-relevant security tools and mechanisms, e.g., SIEM and network-level data encryption.
Pre-launch validation of financial solution compliance and software launch.

Financial software maintenance and evolution

That’s what we offer to ensure everlasting compliance of your financial solution:

Continuous monitoring for security and compliance breaches, regular vulnerability scanning, review and upgrading of data protection measures, and rapid handling of emerging issues.
Regular security and compliance audits backed by comprehensive reports.
Regression testing during financial software revamp to ensure that new and changed code pieces do not break regulatory compliance.

ScienceSoft’s Featured Success Story on Financial Software Compliance

Trading Platform Security and Compliance Consulting

We conducted trading platform penetration testing to reveal the cause of a data breach compromising the Customer’s legal standing and provided a go-to roadmap to achieving regulatory compliance. Thanks to ScienceSoft’s prompt assistance, our Customer managed to quickly fill compliance gaps and timely report breach mitigation efforts to regulators, which helped the company avoid legal penalties and further case investigation.

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Financial Software Compliance Doesn’t Need to Be a Hassle

Trust the vendor with 18 years of experience in financial software development and proven compliance expertise — we have all it takes to create a fully compliant and secure solution.

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