A Data Security Standard Attracts New Financial Services Supporters

The drive to create a data security standard designed for digital financial services applications that use cloud-computing, such as open banking, continues to gain momentum. Anecdotes AI Ltd, Codat Ltd., Skyflow Inc., and Very Good Security Inc. are the latest digital finance companies to join a group of financial technology and security compliance companies supporting the Open Finance Data Security Standard (OFDSS).

The OFDSS standard, the first draft of which was published in November 2021, establishes a common framework for consumer data security, privacy, and control. The standard is intended to create strong, auditable data security guidelines that maintain alignment with common and relevant criteria found in other security frameworks, while providing clear requirements optimized for cloud-native, technology-focused startups and growth-stage companies, the ODFSS committee says.

Other members of the OFDSS consortium include fintechs Flinks Technology Inc., MX Technologies Inc., Plaid Inc., and Truework, as well as security compliance companies Drata Inc., Laika Inc., Secureframe Inc., and Vanta.

“The sensitive nature of financial data makes building customer trust a major challenge for many companies. Yet frameworks like PCI-DSS have proven that industry-accepted standards can become the key to gaining and maintaining that trust in today’s security-conscious world,” Anecdotes chief executive and co-founder Yair Kuznitsov says in a prepared statement. “OFDSS is going to be a game changer in building a foundation of trust.”

A new version of the framework for the OFDSS standard was recently published, updating the proposal to outline application security controls that secure a company’s software development lifecycle. “The OFDSS framework now includes 79 individual security requirements across 13 control domains that address common data security risks,” the OFDSS committee writes in a blog post.

The OFDSS standard is intended to evolve over time to meet the changing needs of the digital financial services industry, incorporate new technology, and mitigate emerging risks. Initial customer pilot programs are planned to take place by year’s end.

“The industry is rallying around OFDSS because it will help raise the bar for data security in the fintech ecosystem at a time when the pace of innovation is accelerating,” Shano Fonseka, head of risk for Plaid says in a prepared statement. “It provides a strong framework that helps fintechs improve security while enabling innovation, gives banks a level of confidence about the companies connecting to their APIs, and, most importantly, helps protect consumers.”