7 Cybersecurity Best Practices 2026 for Fintech SMEs
- Gary Sinnott
- 4 days ago
- 11 min read
Most British fintech SMEs are now facing an urgent challenge as cybercrime costs for smaller companies in the United Kingdom soared over £3 billion last year. For CIOs and IT Managers, implementing ISO 27001:2022 is no longer just an option for compliance but a crucial shield against increasingly sophisticated threats. This guide sets out practical steps for building digital resilience, helping you secure your organisation’s reputation and protect sensitive assets in 2026.
Table of Contents
Quick Summary
Key Message | Explanation |
1. Implement an Information Security Management System | An ISMS establishes a structured approach to manage sensitive information and mitigate cybersecurity risks across the organisation. |
2. Conduct Regular Penetration Testing | Regular testing helps identify vulnerabilities in systems before attackers exploit them, enhancing overall security resilience. |
3. Develop a Live, Dynamic Risk Register | A dynamic risk register allows real-time tracking of emerging threats, enabling proactive risk management strategies in fintech organisations. |
4. Tailor Security Policies and Staff Training | Customised security guidelines and practical training empower staff to recognise and respond to cyber threats effectively. |
5. Strengthen Third-Party Risk Management | Proactively assess and manage third-party risks to prevent vulnerabilities from spreading across interconnected supply chains. |
1. Build an Information Security Management System (ISMS)
Building a robust Information Security Management System (ISMS) represents the foundational strategy for fintech SMEs to systematically protect digital assets and manage cybersecurity risks. This comprehensive framework goes beyond traditional security approaches by creating a structured, organisation wide approach to information protection.
An ISMS provides a systematic method for managing sensitive company information, ensuring its confidentiality, integrity, and availability. By implementing an information security governance framework, fintech organisations can establish clear protocols for identifying, assessing, and mitigating potential security threats.
The core objective of an ISMS is to create a continuous cycle of security improvement. This involves developing comprehensive policies, conducting regular risk assessments, implementing appropriate security controls, and continuously monitoring and reviewing the effectiveness of these measures. The process requires engagement from every level of the organisation, transforming cybersecurity from a technical challenge into a strategic business function.
Key components of an effective ISMS include:
Asset Identification and Classification
Cataloguing all digital and physical information assets
Determining the sensitivity and criticality of each asset
Establishing clear ownership and access protocols
Risk Assessment and Treatment
Conducting comprehensive risk analyses
Developing targeted mitigation strategies
Prioritising risks based on potential business impact
Security Policy Development
Creating clear, actionable security guidelines
Defining roles and responsibilities
Establishing incident response procedures
Continuous Monitoring and Improvement
Implementing ongoing security assessments
Tracking and analysing security metrics
Adapting strategies based on emerging threats
By adopting a structured approach like the multi-disciplinary ISMS framework, fintech SMEs can transform cybersecurity from a reactive cost centre into a proactive business enabler. The goal is not just compliance, but creating a resilient security culture that protects both technological infrastructure and organisational reputation.
Expert Recommendation: Begin your ISMS implementation by conducting a comprehensive baseline security assessment, identifying your most critical assets and potential vulnerabilities before developing your strategic roadmap.
2. Conduct Regular Penetration Testing and Vulnerability Scans
Penetration testing and vulnerability scanning represent critical defensive strategies for fintech SMEs seeking to proactively identify and mitigate potential security weaknesses before malicious actors can exploit them. These systematic assessment techniques provide a comprehensive view of an organisation’s cybersecurity resilience.
The core purpose of vulnerability scanning for UK businesses is to simulate real world cyber attacks and uncover potential security gaps across digital infrastructure. Penetration testers methodically probe systems using techniques that mirror genuine threat actor approaches, revealing vulnerabilities that traditional security measures might overlook.
These assessments typically encompass multiple strategic components:
External Network Scanning
Identifying publicly accessible system vulnerabilities
Assessing potential entry points for external attackers
Evaluating perimeter security configurations
Internal Network Assessment
Exploring potential risks within organisational networks
Testing lateral movement possibilities for attackers
Examining user access controls and permissions
Application Security Testing
Analysing web application and software vulnerabilities
Checking for coding weaknesses and potential exploit routes
Verifying authentication and data protection mechanisms
Benefits of regular penetration testing include:
Early detection of security vulnerabilities
Compliance with industry security standards
Reduced risk of potential financial and reputational damage
Improved understanding of organisational security posture
Fintech organisations should aim to conduct comprehensive vulnerability assessments at least quarterly, with additional testing after significant infrastructure changes. By adopting a proactive approach, companies can stay ahead of emerging cyber threats and maintain robust digital defences.
Expert Recommendation: Select penetration testing providers who understand fintech specific security challenges and can provide detailed remediation roadmaps alongside vulnerability reports.
3. Develop a Live, Dynamic Risk Register
A live, dynamic risk register represents a powerful strategic tool for fintech SMEs to proactively manage and mitigate potential organisational vulnerabilities. Unlike traditional static risk documentation, a dynamic risk register provides real-time insights into emerging threats and changing risk landscapes.
Financial technology firms must adopt a comprehensive risk management approach that goes beyond simple checklist compliance. This living document continuously tracks and evaluates potential risks across operational, technological, financial, and regulatory domains, enabling swift and strategic decision-making.
Key components of an effective dynamic risk register include:
Risk Identification
Capturing all potential internal and external threats
Documenting risks from multiple perspectives
Ensuring comprehensive threat landscape visibility
Risk Assessment
Quantifying potential impact and likelihood
Establishing clear risk scoring mechanisms
Prioritising risks based on severity
Continuous Monitoring
Regular review and update cycles
Real-time tracking of risk status
Implementing automated risk detection tools
Mitigation Planning
Developing specific response strategies
Assigning clear accountability
Creating actionable remediation workflows
The most effective risk registers integrate multiple data sources, including threat intelligence feeds, internal audit reports, compliance updates, and external cybersecurity indicators. This multifaceted approach ensures a holistic understanding of the organisation’s risk exposure.
By maintaining a dynamic risk register, fintech SMEs can transform risk management from a reactive process to a proactive strategic advantage. The register becomes a living document that adapts quickly to technological changes, regulatory shifts, and emerging cyber threats.
Expert Recommendation: Schedule monthly risk register review meetings with cross functional teams to ensure comprehensive risk visibility and collaborative mitigation strategies.
4. Implement Bespoke Security Policies and Staff Training
Customised security policies and targeted staff training represent the human firewall protecting fintech organisations from cyber vulnerabilities. By developing organisation specific guidelines and empowering employees with practical cybersecurity knowledge, SMEs can transform their workforce into an active defence mechanism against potential digital threats.
The UK Cyber Security Growth Strategy emphasises creating contextualised security frameworks that reflect an organisation’s unique operational landscape. This means moving beyond generic templates to design policies that address specific technological ecosystems, regulatory requirements, and organisational risk profiles.
Key elements of an effective cybersecurity policy and training programme include:
Policy Development
Mapping organisational technology infrastructure
Identifying specific vulnerabilities
Creating clear, actionable security guidelines
Establishing precise employee responsibility protocols
Staff Training Components
Practical threat recognition techniques
Social engineering awareness
Data protection and handling procedures
Incident reporting mechanisms
Training Delivery Approaches
Interactive online modules
Scenario based learning experiences
Regular simulated phishing exercises
Quarterly refresher training sessions
Effective security awareness requires moving beyond theoretical knowledge to practical skill development. Employees must understand not just what policies are, but why they matter and how to implement them in real world scenarios.
Organisations should aim to create a security culture where every team member feels personally responsible for protecting digital assets. This involves transforming cybersecurity from a technical requirement to a shared organisational value.
Expert Recommendation: Design training scenarios that reflect your specific business context, using real world examples from your industry to make cybersecurity learning immediately relevant and engaging.
5. Strengthen Supply Chain and Third-Party Risk Management
Fintech supply chains represent complex digital ecosystems where cybersecurity vulnerabilities can propagate rapidly across interconnected organisations. Managing third-party risk is no longer optional but a critical strategic imperative for protecting organisational integrity and customer data.
Cyber risk management strategies have evolved to address the intricate relationships between technology providers, data partners, and financial service platforms. Each vendor represents a potential entry point for cyber attacks, making comprehensive risk assessment essential.
Key strategies for robust supply chain cybersecurity include:
Vendor Risk Assessment
Conduct comprehensive security questionnaires
Review vendor cybersecurity certifications
Evaluate historical security performance
Establish minimum security standards
Contractual Security Requirements
Mandate specific security controls
Define clear incident reporting protocols
Include right to audit clauses
Establish consequences for security breaches
Continuous Monitoring
Implement ongoing vendor security assessments
Use automated risk tracking tools
Monitor vendor security news and incidents
Maintain updated vendor risk profiles
Data Protection Governance
Restrict data access permissions
Enforce encryption requirements
Implement robust data sharing protocols
Conduct regular access reviews
Fintech organisations must recognise that their cybersecurity is only as strong as the weakest link in their supply chain. Proactive, systematic third-party risk management transforms potential vulnerabilities into managed, mitigated risks.
Expert Recommendation: Create a standardised vendor security assessment framework that can be quickly deployed across all potential and existing technology partners.
6. Plan and Test Business Continuity and Incident Response
Business continuity and incident response planning transform unexpected disruptions from potential catastrophes into manageable challenges for fintech organisations. These strategic frameworks ensure operational resilience, protecting critical business functions and customer trust during technological or cyber emergencies.
The business continuity planning framework represents a comprehensive approach to maintaining organisational stability under adverse conditions. For fintech SMEs, this means developing robust strategies that enable rapid recovery and minimal service interruption.
Key components of an effective business continuity and incident response plan include:
Risk Assessment and Identification
Mapping critical business processes
Identifying potential disruption scenarios
Evaluating potential financial and operational impacts
Prioritising recovery strategies
Incident Response Protocols
Establishing clear communication channels
Defining roles and responsibilities
Creating step by step response procedures
Developing escalation mechanisms
Technical Recovery Strategies
Implementing redundant systems
Maintaining offsite data backups
Establishing alternative technology infrastructure
Creating failover and recovery mechanisms
Regular Testing and Validation
Conducting tabletop simulation exercises
Performing periodic incident response drills
Updating plans based on test outcomes
Ensuring team readiness and familiarity
Successful business continuity planning goes beyond technical solutions. It requires cultivating an organisational culture of preparedness, where every team member understands their role in maintaining operational resilience.
Expert Recommendation: Schedule bi annual comprehensive incident response simulations that involve multiple departments and test your organisation comprehensive recovery capabilities.
7. Adopt Managed Detection and Response for 24/7 Protection
Managed Detection and Response represents the frontline defence for fintech SMEs seeking comprehensive cybersecurity protection beyond traditional security measures. This advanced approach provides continuous monitoring, rapid threat identification, and immediate incident response capabilities that transform cybersecurity from a passive defence to an active protection strategy.
Continuous threat monitoring strategies empower fintech organisations to detect and neutralise potential cyber threats before they can cause significant damage. MDR services operate as a virtual security operations centre, offering expert protection without the substantial overhead of maintaining an in-house team.
Key components of effective Managed Detection and Response include:
Continuous Threat Monitoring
Real time network surveillance
Advanced threat detection algorithms
Behavioural analytics
Anomaly identification mechanisms
Rapid Incident Response
Immediate threat containment
Comprehensive forensic analysis
Precise threat neutralisation
Detailed incident reporting
Multi Layer Protection
Endpoint security coverage
Cloud infrastructure monitoring
Network perimeter defence
Application security scanning
Advanced Threat Intelligence
Global threat database tracking
Predictive risk assessment
Emerging vulnerability monitoring
Proactive defence strategy development
By implementing MDR, fintech SMEs transform their cybersecurity from a reactive approach to a predictive, intelligent defence mechanism. This strategy provides peace of mind through expert monitoring and rapid response capabilities.
Expert Recommendation: Select an MDR provider offering transparent reporting, demonstrable expertise in financial sector cybersecurity, and the ability to customise protection strategies for your specific organisational needs.
Below is a comprehensive table summarising the key topics and strategies discussed throughout the article about maintaining cybersecurity for fintech SMEs.
Aspect | Description | Key Components |
Information Security Management System (ISMS) | A structured framework for managing sensitive company information efficiently. | Asset identification, risk assessment, policy development, and continuous improvement. |
Penetration Testing and Vulnerability Scans | Regular assessments to identify and mitigate security gaps. | External network scanning, internal assessment, and application security testing. |
Dynamic Risk Register | A real-time tool for managing and tracking risks. | Identifying, assessing, and monitoring risks, with clear mitigation planning. |
Security Policies and Staff Training | Creation of tailored policies and comprehensive employee engagement programmes. | Organisationally-specific policies and scenario-based training exercises. |
Supply Chain Risk Management | Strategies to secure organisational integrity across partnerships. | Vendor assessments, contractual security controls, and continuous monitoring. |
Business Continuity Planning | Frameworks to manage disruptions effectively and maintain operations. | Incident response protocols, technical recovery strategies, and regular testing. |
Managed Detection and Response (MDR) | Continuous real-time network surveillance and rapid incident response. | Threat monitoring, multilayer protection, and proactive defence strategies. |
This table serves as a clear outline of the recommendations and methodologies provided in the article for enhancing fintech SMEs’ cybersecurity posture.
Elevate Your Fintech Security Strategy with Expert Guidance
Fintech SMEs face unique challenges in building resilient cybersecurity frameworks that go beyond basic compliance. From establishing a robust Information Security Management System to managing dynamic risk registers and third-party vulnerabilities, this article highlights the crucial steps needed to protect sensitive digital assets. If you are aiming to turn these challenges into competitive advantages, Freshcyber is here to guide you through every stage with tailored solutions designed specifically for businesses like yours.
Discover how partnering with Freshcyber can help you implement industry-leading practices such as comprehensive penetration testing, live risk management, and bespoke policy creation. Our Virtual CISO service delivers executive-level security leadership to ensure your fintech organisation is not only compliant but truly resilient. Take control of your cybersecurity future today by exploring our extensive resources in SME Security and fortify your foundation with tried and tested frameworks detailed on our main site Freshcyber. Begin your journey towards digital resilience and secure your competitive edge now.
Frequently Asked Questions
What is an Information Security Management System (ISMS) and why is it important for fintech SMEs?
An Information Security Management System (ISMS) is a structured approach to managing sensitive company information, ensuring its confidentiality, integrity, and availability. To implement an ISMS, conduct a comprehensive baseline security assessment to identify your most critical assets and vulnerabilities.
How often should fintech SMEs conduct penetration testing and vulnerability scans?
Fintech SMEs should aim to conduct comprehensive penetration testing and vulnerability assessments at least quarterly, and following significant infrastructure changes. Schedule these assessments regularly to stay ahead of emerging cyber threats and maintain robust digital defences.
What should be included in a dynamic risk register for fintech SMEs?
A dynamic risk register should include risk identification, risk assessment, continuous monitoring, and mitigation planning. Start by capturing all potential internal and external threats, and ensure you review and update the register monthly with cross-functional teams to maintain comprehensive risk visibility.
How can customised security policies and staff training help protect fintech organisations?
Customised security policies and targeted staff training transform employees into an active defence mechanism against cyber vulnerabilities. Develop practical training scenarios tailored to your business context to ensure staff can recognise threats and understand incident reporting mechanisms.
What strategies can fintech SMEs use to manage third-party risk in their supply chain?
Fintech SMEs can manage third-party risk by conducting comprehensive vendor risk assessments and establishing clear contractual security requirements. Implement a standardised vendor security assessment framework and regularly monitor vendor compliance to proactively protect against vulnerabilities.
What are the key components of an effective business continuity and incident response plan for fintech SMEs?
An effective business continuity and incident response plan should include risk assessment, incident response protocols, technical recovery strategies, and regular testing. Schedule bi-annual comprehensive incident response simulations across multiple departments to ensure preparedness for potential disruptions.
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