With the fintech market set to be worth close to 400 billion USD in 2025, the industry continues to revolutionise financial services through innovations that make payments frictionless and seamless. However, as these technologies continue to evolve, so does the vulnerability of the personal data processed and stored on the systems. Fintech platforms can be prime targets for hackers due to the types of data they store, and the possibility of stealing valuable data and funds. With the rapid adoption of AI integration in financial transformation, the importance of privacy teams and data protection officers (DPOs) working closer with finance and security teams has never been greater.

Responding to data breaches

Fintech companies face one of the highest levels of data breaches, with reportedly 65% of organisations falling victim to ransomware attacks in 2024. Common causes of some of these breaches included weak data storage security, poor encryption standards or insufficient access controls, which have resulted in hefty fines from data protection regulators in some instances.

Here, a DPO plays an important role in ensuring that organisations are adequately resourced to identify, respond and take remedial action against incidents in a timely manner.  In the event of a breach, a DPO can work with the IT and security departments to contain the breach and assess its impact before it grows into a situation that cannot be contained.

Third-Party risk assessments

Despite the fintech sector thriving on third-party partnerships and integrations, this reliance broadens the risk factors of data being compromised. In an industry constantly adopting innovations, companies frequently fail to revisit initial vendor assessments when circumstances change. This oversight can result in outdated contracts, non-compliant data processing practices, and emerging security vulnerabilities, all of which directly impact privacy operations.

For instance, the integration of a new payment processing provider undergoes an initial due diligence process to ensure compliance. However, if the vendor subsequently updates its systems without aligning them with new regulations like GDPR or revisiting the Data Processing Agreement (DPA), it could expose the two parties to significant risks, including fines for non-compliance or inadequate data handling practices.

One way a DPO can mitigate such risks is by periodically monitoring and reviewing existing and pending third-party vendor contracts. By tracking any changes in vendor operations, technology updates, or shifts in business practices that could affect data security and compliance, a DPO can enable a business’s privacy programme to remain agile.

Overlapping regulations

Fintech companies sit at the intersection of finance, technology, and data, making the industry heavily regulated, with laws varying globally. New and evolving laws like DORA and the EU AI Act introduce additional compliance burdens for fintech companies using AI-driven decision-making like CRM platforms, fraud detection, and chatbots.

With organisations that operate in multiple jurisdictions, a DPO is well-positioned to ensure that businesses are adequately safeguarded, by utilising recommended mitigation standards like Data Protection Impact Assessments (DPIAs) and Standard Contractual Clauses (SCCs) to align organisational practices with evolving regulatory requirements.

Employee training and awareness

Despite fintech’s heavy reliance on AI systems, advanced analytics and automation, human errors remain a significant risk when handling sensitive financial data.

A DPO plays a key role in developing a comprehensive training and awareness programme that fosters a culture of privacy across the organisation. Providing regular training on the latest data protection practices and protocols not only helps mitigate the risk of human error but also ensures that employees are better equipped to identify, respond, and contain security incidents like phishing and social engineering effectively.

For fintech startups especially, appointing the right external DPO early on brings not just compliance oversight, but strategic value by embedding privacy by design principles into the core of innovation.

Businesses must remain proactive to adapt to evolving regulations touching on AI, finance, technology and data, with privacy teams playing a key role in guiding organisations. As a global DPO, HewardMills’ governance experts can help you navigate emerging regulatory changes and implement these requirements imminently.