What should you know about the database of your Digital Bank?

A customer database is one of the most critical assets for every company, because it collects information about all the customers that had interactions with the company, their activities and purchases or other relevant information. For a digital bank, a database is not just a list of customers – it includes details about current accounts, balances, transactions, identity documents, tariff groups, etc. For banks, including digital banks, to lose a database means losing the business. It is not just an essential component of the successful business; it is the core of the company.

For this reason, make sure that your Database is protected internally and externally, from the legal and security perspective.

Legislation and regulatory

GDPR

The GDPR means that companies all over the world, irrespective of where they are based, will have to comply with the legislation's laws on how user data about EU nationals is gathered, processed, and stored. The legal framework requires to protect sensitive customer data internally and introduce different kinds of data security policies and preventive actions within the company. In case the company does not comply with the rules, the GDPR directive imposes a variety of penalties.

Financial regulation

When the company applies for a license, together with the application form, it submits all company policies, including those related to security and data security. To comply with the regulator requirements, it is mandatory to introduce a list of measures and follow activities stated in policies. In case the regulator detects violations, it can impose fines or revoke a license.

Security

One of the most common risks is a case of unauthorised persons or employees stealing the bank's Database.

For this reason, special attention is required to establishing security policies for Database's protection. Privileges and roles are defined to control user access to databases. The roles and privileges are granted at the administrator level. The administrator grants privileges and roles to users and also can permit those users to give specific access rights to others. All user database actions, including those done by administrators, can be monitored and recorded, thus minimising any fraudulent or unauthorised activities from the side of employees.

The company must take all necessary actions to implement all security measures on-site. It includes antivirus programmes, increasing the literacy of security concerns of employees, mandatory usage of roles & access functionalities. The same security measures must be taken if you use the SaaS solution. Despite the fact that the overall security of the solution is on the provider side, none of the provider's employees can access the Database.

Legal documents

When signing your agreement with your Digital banking software provider, check if the agreement includes a paragraph about the Database. It must display all the information about the usage of Database, intellectual property rights of the Database and the process of transferring the Database in case the agreement is terminated. Your solution provider must grant you a non-transferable perpetual licence. Meaning that the provider doesn't possess or use data and the Database for its own internal purposes and acknowledges that copyright of the content and data belongs only to you. If your provider does not include such a paragraph in the agreement, then there is a risk of not getting your Database if you decide to part ways with the provider.

For SaaS solutions, the technical capability to download your Database is a must. However, not all platforms provide such functionality. It means that the client is forced to continue using this solution because creating a new database can take too much time and effort.

Conclusion: When you choose a software provider, evaluate not only solution capabilities or user interfaces for the Digital Core Banking solution, but also flexibility necessary to meet your needs in the future, especially in the case of the Database. Please remember that the Database is your asset, and it must be sufficiently protected in order nobody could limit your access or ownership.

About Advapay`s platform: Advapay`s Digital Core Banking platform empowers fintechs to build their digital banks and accelerate digital transformation. The platform provides all essential functionalities, a back-to-front system and a set of tools to customise and bring new integrations. With Advapay, potential and existing customers can connect either to the cloud-based SaaS or on-premise software. Contact us today to learn how Advapay can help you to build your Digital bank.