What is Technical Due Diligence?
Technical Due Diligence (TDD) is a thorough examination of all technological aspects of an application within a FinTech company. Think about evaluating the software and the underlying technology infrastructure. 'For example, we look at how the application is built, and what the quality of the code is. But also how the development process goes, and whether you use standards such as the four-eyes principle in that process. Or, for example, that the same person who develops new code cannot independently put this code into production right away.' In addition to evaluating the software and technology infrastructure, such a study also focuses on cybersecurity. 'We also look at security. Within the environment where that application is running, we can do penetration tests, such as simulating cyber attacks to expose any vulnerabilities.'
What does Technical Due Diligence look at?
In addition to practical issues surrounding technology and security issues in its use, TDD also examines legal facets: data privacy, regulatory compliance, and intellectual property. 'That's how you assess all the relevant facets. To see from start to finish whether your technical process and products meet the best development practices, and the high standards imposed on ourselves.'
Why is Technical Due Diligence important?
A TDD identifies technology risks and challenges, such as technical backlogs or outdated systems. This type of due diligence is so important in FinTech because of the industry's rapid technological developments and strict regulations. With the results of a TDD, you make informed decisions and reduce potential risks. 'A good example of new regulations that financial firms must comply with is DORA. The Digital Operations Resilience Act was introduced by the EU early last year and contains new, stricter rules that the entire financial sector in Europe must comply with. As a financial company, you only have time for that now until 2025.' DORA focuses primarily on how organizations have set up their IT risk management framework, governance structure, and incident management. But also, for example, how one regularly tests their systems and third-party vendors. 'At VI Company, we understand the importance of keeping up with changing regulations in the financial sector. By doing this proactively and working closely with our clients, we ensure that they are ready on time when new regulations become mandatory.'
What can I do with a TDD report?
On each of the named components, we produce a summary based on our findings. 'You can approach those almost at traffic light level. If the signals are red, then something must be done quickly. Then you are talking about serious safety problems, for example. If the outcome for a component is yellow, there is no panic, but there is work to be done. And green means you're doing just fine. This gives you a total overview where you can immediately see where action is or is not required. Then you can think of: The documentation is in order, but the code quality is poor. And the infrastructure, which is in very good shape.'
And how to proceed?
With the results of a TDD, you are back in control of the situation yourself. A situation that you may not have even expected or seen coming, but something had to be done about it. 'We speak the language of our clients' technicians and developers. We help them to streamline processes and prevent errors. To ensure that work is done faster, easier, and better. Because ultimately that means fewer mistakes and therefore lower costs. And we make sure you have that under your control.'
Exactly the MOT your technology engine could use. So that you are not only up-and-running, but also always up-to-date!
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