Since the last two decades, there is an emerging pattern of financial organizations that are embracing cloud-native technologies to aid their transition from a legacy to an agile framework. This requires such organizations to adopt cloud-based containers provisioned alongside a DevSecOps model to reduce security risk without losing operational efficiency. While this enables businesses to improve development and operational models, there are evolving challenges that require systemic approaches to maintain standards. This also means that Fintechs embrace the right mix of technology and processes that help to achieve operational excellence without compromising innovation or customer expectations.
In this article, we will learn why policy governance continues to be a challenge for the Fintech sector, and how adopting a Policy-as-code model can solve this.
Industry Requirements and Challenges
At the beginning of 2019, the Global Fintech market share was estimated to be worth more than $187 billion. With a projected growth of 23% between 2021 and 2025, Fintech is expected to retain its position as one of the fastest-growing industries worldwide.
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With growth, however, the industry continues to face a number of complex challenges including customer expectations, security, and compliances. Over the last decade, consistent revision of global regulations on storing and transmitting data is one such challenge the Fintech industry continues to grapple with. These include regulations across multiple verticals of the Fintech sector, including:
- Payments and Transfers: e-commerce, mobile, digital currencies, peer-to-peer, and cross-border transacting.
- Personal Finance: mobile trading, advisory, personal financial management.
- Insurance: enterprise and personal.
- Alternative Financing: crowdfunding, invoice, and supply chain finance.
Such regulations enforce mandatory compliances such as, PCI-DSS, SOX, GDPR, etc., which require an organization to follow guidelined standards on security and infrastructure. Due to the nature of complexity and the sheer number of such compliance policies, Fintechs struggle to interpret and adhere to regulations. More so, such enforced restrictions also act as potential roadblocks to innovations unless these are dealt systematically.
One such approach is to include encoded policies within delivery pipelines through a Policy-as-code model. This lets Fintechs blend policy execution as part of an automated workflow without impacting operational efficiency. Let us learn in detail what that means.
What is Policy-as-Code?
Policy-as-code is an approach that automates governance and policy enforcement as part of a software delivery workflow. Where policies within a technical framework may be segmented into :
- Infrastructure - for automatic validation and deployment within pipelines, performance monitoring, alerts, resource limitations, cost optimization, provisioning, version control, etc.
- Security - policies on data privacy, access control, and infrastructure integrity.
- Regulatory Compliance - includes external regulatory standards that usually require adopting Security and Infra best practices.
This enables a framework where policy decisions are automated for higher levels of precision and compliance. To do so, policies are coded in a high-level computer language that are executed to enforce policies as part of the pipelines.
- Streamline Development Practices: With policies embedded in code, decision-making and verifications are automated, thereby giving developers the independence to manage features without the risk of compromising on compliance.
- Infrastructure Control: Enables easier control of infrastructure policies, that spans across all instances (development, testing, and production) and layers (databases, storage, or network). Such policies may include version control, disaster recovery, resource allocation, performance monitoring, etc.
- Cost Savings: Apply policies that adopt best practices on cost optimization and resource utilization. These may include monitoring of abandoned resources, overutilization, resource reusability, and enabling analytics of expense insights.
- Deployment Validation: Allows automated testing of resources for compliance before deployment. By writing policies that block non-compliant elements from being provisioned, irregularities can be flagged and prevented within a pipeline.
- Enforcing Security: When automation expands in an organization, manual verifications are considered far too slow and ineffective. To solve this, security policies are enabled for an added layer of protection within automated systems.
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Moving Security Controls Into Code
Particularly for the Fintech sector, where compliance and security are critical aspects to maintain operational standards, embracing a policy-as-code model is imperative. This helps to establish a framework where customer information remains protected, application changes are tracked, while data and security policy updates are deployed with audit readiness.
By coding security policies with a pipeline, Fintechs can leverage technology to automate:
- Authorization & Access control
- Change Validation
- Create Compliant Workflows
- Audit trails of policy changes
- Version Control
- Disaster Recovery
In a cloud-native framework, there are multiple ways of adopting a policy-as-code model. One way of doing so is to leverage Kubernetes Admission Controllers that encodes policies within a pipeline without impacting an existing DevOps workflow. This essentially implements a gatekeeper plugin that enforces security and compliance baseline by invoking admission webhooks for specified operations of an entire cluster.
However, with a framework of distributed technologies, implementing authorization subsystems is an operational nightmare. This is because every application, microservice, and infrastructure component within a framework needs its own authorizing operators.
Open Policy Agent (OPA)
OPA was born from the need to unify and enforce policies across different systems using multiple technologies and processes. OPA is an open-source policy engine that can be used for more than just implementing authorization controls. By leveraging OPA as External Admission Controllers, organizations can enforce custom admission control policies without remodeling core components of the workflow.
This allows organizations to achieve granular control over their environments that eliminates the need to write policies in a different language or framework for every product or service. Moreover, through intelligent platforms such as Magalix’s SaaS-based OPA, organizations can apply policies across multiple clusters with a single click.
To know more on how Magalix can implement an enterprise-grade OPA with pre-built policies, click here.
Implementing validation checks and enforcing governance are two fundamental success factors for any software delivery process. This is because early identification of errors or non-compliant elements always helps avoid critical incidents and regulatory non-compliance.
With Policy-as-code getting mainstream, Fintechs leverage DevOps benefits while controlling costs, securing resources, ensuring compliance, and validating infrastructure easily. Through Magalix’s OPA as SaaS platform, Fintechs can get security and governance best practices enforced through encoded policies, without any operational overhead. This allows businesses to protect their systems from non-compliance and disruptions, while ensuring existing workflows remain unimpacted.