How ISO 27001 Simplifies Consumer Finance Innovation

August 6, 2020

At (virtual) board rooms around the world, data security is a top priority. Senior managers at consumer finance companies know this discussion all too well. To manage this critical part of their business, these leaders reference ISO 27001 as their benchmark, often with confusion. Below, we explain what this standard is and how consumer finance companies may use it to their advantage.   

What is ISO 27001?

The international organization of standards (ISO) created ISO 27001 to standardize secure data management practices. The guiding purpose of these formats is to provide consistent rules for any entity that needs to manage data securely. Secure data is any information that contains confidential information. This data could be financial transactions, biographical information, or any other personal identifying artifact.

Organizations use an information security management system (ISMS) to meet these objectives. An effective ISMS should cover all aspects of an organization’s relationship with data spanning its confidentiality, availability, and integrity. This holistic approach means:

  • Assessing all potential threats, their associated impact, and costs
  • Categorizing risks by probability and defining action plans to mitigate them
  • Defining processes and security controls
  • Setting access and behavior policies for employee access
  • Laying rules for documentation, periodic audits, and continuous improvements

ISO 27001 gives companies internationally-recognized guidelines to build an ISMS.

What companies need to do for certification

While any organization can adopt the standards, becoming ISO 27001-certified is an arduous undertaking. The process begins by documenting and auditing existing data management practices. From there, firms will assess any gaps, creating an action plan, then conducting another audit.

Once the organization is ready, they will hire an accredited company to audit and certify their work. The accreditors will scrutinize every document and control the candidate firm put into place then offer recommendations to improve weaknesses. Once the certifiers are satisfied, the candidate receives its ISO 27001 badge of honor. 

In total, businesses spend an average of three to six months achieving their certification. However, the wait is worth it as being ISO 27001-certified unlocks new levels of business potential.

How ISO 27001 provides value to financial institutions and their customers

Financial institutions, by their very nature, deal with sensitive data. After all, payment transactions can reveal telling information about the user. Regulators and legislators are well aware of this situation. 

In addition to general data protection rules such as GDPR, laws such as Europe’s revised payment services directive (PSD2) dictate how financial institutions handle user data. It should come as no surprise that managing this data is a core activity for any finance company. 

ISO 27001 certification gives these firms a unified structure to not only manage data properly internally but also meet contractual and external regulatory requirements. In turn, compliance across multiple jurisdictions becomes markedly more manageable while giving their clients assurances that their data is safe.

What consumer finance firms can expect when partnering with an ISO 27001 certified provider

Working with ISO 27001-certified providers can transform the way consumer finance companies build and operate their products. Here are some of the highlights. 

Uniform data 

ISO 27001 compels companies to standardize data formats. When working with a certified provider, the data shared will be easily readable. Connecting to an API requires little work and maintenance. Consumer finance firms can expect quick onboarding when working with certified providers.

Assurance of data protection and compliance

Working with an ISO 27001-certified company means that any data you access meets all international requirements governing data protection. These businesses spend considerable sums to meet compliance obligations. Accessing data from an ISO 27001-certified company means that it automatically complies with any relevant laws. 

Hit international security benchmarks

Lawmakers around the world use ISO 27001 to help guide legislation on data management. Providers certified in these protocols enable their users to stay compliant with little effort. Therefore, consumer finance companies can focus their in-house efforts towards building products instead of time-draining regulations. 

Planned Continuity

Part of the ISO 27001 certification process requires candidate firms to prepare for the unknown. Whether it be a natural disaster or a power outage, certified providers have contingency plans to keep data flowing. Working with an ISO 27001-certified company means there’s no need to worry about data outages.

Benefits and payoffs of trusting a company that follows these standards

Using a financial services provider that is ISO 27001-certified unlocks time and cost-saving benefits. Here are the main benefits:

Scaling is easy

All companies wanting to grow their business know that their underlying systems must scale to meet demand. Certified external providers can provide both the tools and data compliance to make this growth possible.

Data is protected while maintaining compliance

Financial services deal with some of the most sensitive data. ISO 27001-certified third parties have compliance built into their entire product stack. By working with a certified firm, consumer finance companies can ensure that their users’ data is safe while staying compliant with all relevant regulations.

Cost-effective, secure data management

While meeting ISO 27001 compliance is best practice, being certified takes data management to the next level. ISO 27001-Certified Open Banking providers allow companies to access secure data management that is also affordable. 

Brand trust increases

More than ever, consumers are prioritizing data protection. ISO 27001 is the global standard for ensuring that your customer’s personal information is safe. Working with ISO 27001-certified providers shows your clients you’re serious about data security, increasing trust in your brand. 

How Unnax helps financial services companies securely manage data

Unnax — a leading financial technology services provider — is ISO 27001-certified. We are the only Open Banking provider licensed in Spain able to offer a full array of innovative tools to consumer finance companies. 

Our account information (AISP), payment initiation (PISP) services, and electronic money products empower firms to build great financial products for their users. As we manage data with ISO 27001 built-in, innovators can create financial services that show users a commitment to protecting their data. In turn, merchants can quickly capture market share without spending outsized amounts on data management.


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