What You Need to Consider When Selecting a Fintech Vendor
By: Elisa Logan, Vice President Marketing
Now, more than ever, relationships between insurers and technology vendors have become increasingly important - giving insurers a competitive edge. Capegemini and Efma’s 2018 World Insurance Report found that 90 percent of insurance executives fear losing business to companies that have invested in fintech, yet only 43 percent of insurance companies have developed a fintech strategy.
Consider these four factors when selecting a fintech vendor that’s right for your business:
- How many services or tasks will the vendor outsource to other vendors?
A fintech partner may offload much of your business to subvendors that may also do the same. The issue is that each time your business gets outsourced, more people will handle policyholder data, which increases the level of risk. You’ll need to know ahead of time about each company that will deal with this information and what steps they’ve taken to insure that it stays protected.
- What investments has the vendor made in information technology security and protocols? How carefully does it monitor data security with its subvendors?
The vendor you choose should strongly support security and compliance. As an insurer, you have access to two of the most desirable categories of customer data: protected health information and payment information. The right vendor will understand the importance of having strong security precautions in place to protect this information and will acknowledge its commitment by obtaining and then maintaining proper industry credentialing.
These include achieving compliance with:
HIPAA regulations, Payment Card Industry (PCI) Security Standards Certification, Service Organization Control 1 and 2 Compliance, and National Automated Clearing House Automation (NACHA) Certified
- How well does the vendor protect against potential cybersecurity threats?
It’s critical that any vendor you use has payment security as its top priority. While evaluating vendors, make sure that the vendor uses the most current encryption technology available, plus ask for copies of its most recent security assessment. In doing so, you’ll get an in-depth view of the vendor’s security posture to base your decision. Once you have a relationship with a vendor, you should then submit a yearly security questionnaire and have an outside company evaluate the answers.
- What’s the vendor’s strategy for business continuity and disaster recovery?
Data protection involves more than just security; it’s also about keeping it safe and available during a service outage or interruption. Ensure that vendor you choose has established policies and protocols beforehand to make data available at all times and if the data is stored onshore. Also, review the vendor’s investments in data encryption and backup system, so you’ll know data is protected even while at rest.
Find out how the VPay total payment solution can make a difference for you.
Visit vpayusa.com or call 855-VPAY-USA to get started.
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