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Cybersecurity Risks when Fintech Firms Go International to Find Tech Talent

08-19-2018, 23:32   News   

Facing stiff competition from U.S. tech giants, fintech companies are looking overseas and finding greener pastures. But Rick D'Angona, chief executive of third-party credentialing and risk assessment firm 3PAS Global, says offshoring engineering increases cybersecurity risks, especially in nations known for having higher rates of fraud and corruption. While savings can be achieved by using services overseas, given all of the extra risk management and compliance controls, Aaron Spradlin, chief executive and co-founder of cybersecurity firm cleverDome, questions how much money an fintech company really saves. 
Spradlin praised the companies noted in the InvestmentNews article (FinMason, TradePMR and Oranj) as examples of technology vendors doing things the right way, but he said there still are cybersecurity risks involved when using non-domestic services. "The reality is, things will break down from a control perspective. When all of a sudden something is breaking in the product and the chief developers are all offshore, the only way to fix it is to get production data," he said.
That would require the offshore teams to access privileged data that perhaps they shouldn't. "It's not the best practice at all, but that's typically what happens. For advisers vetting technology vendors, it's a practice that should disqualify the vendor,” Spradlin said.