Banks choose steady fintech partners over sexy technology, says security rater Bitsight 

Jake Olcott

Partnerships between big banks and agile fintech companies are being put at risk by the perceived insecurity of startups, according to cybersecurity auditor Bitsight. 

 Security rater Bitsight unveiled its Peer Analytics service at the RSA Security Conference in San Francisco on March 8th. Speaking after the event, the vendors VP of government affairs, Jake Olcott, warned that third-party partnerships are an emerging source of danger for banks. 

 The emergence of challengers in the fintech sector has forced big banks to work with partners,” said Olcott, but this presents a new risk because their methods of risk assessment need updating. 

 According to Olcott, most C-level executives are aware of the dangers of third-party partnerships but lag behind in their methods of risk aversion. Though 97% of technology professionals are aware of the importance of cybersecurity, many still use primitive processes to implement it. Its not unknown for companies to send out questionnaires asking: do you have good security?” said Olcott. 

 The rapidly changing nature of cybercrime means that the threats, expectations and standards of care associated with security are constantly in flux, with todayadequate’ being tomorrows source of shame. Traditional approaches to cyber assessment  – like point-in-time security audits and compliance reviews – fall woefully short in analysing the risks of working with a partner, said Olcott. 

 When banks adopt more sophisticated methods of cyber risk assessment, fintech startups will find themselves under much tougher scrutiny, Olcott warned. The potency of a fintechs technology is no longer the deciding factor in a partnership. Increasingly often a financial institution will choose a partner on the basis of their security rating,” said Olcott. 

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