Financial services companies hold some of the most sensitive customer information, making them prime targets for cyber threats from cybercriminal syndicates and nation-state-backed groups. These threat actors continuously probe for critical vulnerabilities across an expanding attack surface of digital assets that now includes cloud infrastructure and third-party APIs. 

When attackers do succeed, the consequences are dire and can ripple through the entire financial ecosystem, harming everyday citizens. As a result, regulators constantly add and update regulations to safeguard the broader economy. For financial services companies, navigating these shifting regulations requires simultaneously juggling compliance with new rules while keeping operations running smoothly. This is where crowdsourced cybersecurity can help. It connects organizations with expert ethical hackers and pentesters, enabling organizations to strengthen their security posture for measurable risk reduction across their growing assets while meeting compliance requirements.

In this blog post, we’ll cover the major regulations that impact financial institutions and how the Bugcrowd Platform can help them meet these requirements. 

An overview of the major security regulations in the financial services industry

The following regulations, while not exhaustive, are some of the most important compliance considerations for financial institutions across the United States and Europe.

Payment Card Industry Data Security Standard (PCI-DSS)

The PCI-DSS apply to any organization that accepts consumer payment cards. These guidelines, established by the Payment Card Industry Security Standards Council (PCI SSC), ensure that customer information is protected during transactions. Here are two specific guidelines that relate to cybersecurity: 

  • PCI-DSS 4.0 / 6.3.1 requires organizations to implement systems to identify and manage security vulnerabilities. 
  • PCI-DSS 4.0/6.4.1 requires organizations to protect themselves against common vulnerabilities and have systems to identify and fix new threats on an ongoing basis. 

Crowdsourced security can help meet both of these requirements. To meet 6.3.1, the PCI-DSS recommends using managed bug bounty programs (MBBs) to identify and remediate security vulnerabilities. For ongoing assessments, organizations can use offensive security testing like pen testing as a service (PTaaS), which allows them to continuously conduct penetration tests to identify vulnerabilities. According to Gartner®’s Innovation Insight: Penetration Testing as a Service, PTaaS can help clients meet regulatory requirements as part of the service, offering high levels of standardization, support for custom reporting formats, and alignment with specific compliance frameworks.*

Privacy regulations

Financial services organizations must comply with a litany of privacy regulations that vary by jurisdiction. Noncompliance can trigger severe financial penalties and regulatory action. Below are three major regulations you should know: 

  • General Data Protection Regulation (GDPR)—Requires organizations operating in the EU to implement secure data processing practices to protect citizens’ privacy. These practices include encryption, pseudonymization, and regular security testing by security experts. Under Article 32, they must also implement a process for the ongoing assessment of their security initiatives. 
  • California Consumer Privacy Act (CCPA)—Requires for-profit businesses in California to implement reasonable security measures to protect resident data from cyber threats and unauthorized access, destruction, or misuse. Additionally, organizations must perform an annual security audit for all third-party tools that process personal consumer data. 
  • Gramm–Leach–Bliley Act (GLBA)—Requires U.S. financial institutions to safeguard customer personal information through appropriate protective measures and conduct regular testing to verify their effectiveness. 

Crowdsourced security can help financial services organizations meet these regulations. With the help of crowdsourced security, organizations can create vulnerability disclosure programs (VDPs) and/or MBBs to proactively identify and remediate vulnerabilities while satisfying key compliance mandates such as GDPR Article 32, the GLBA’s requirement for regular testing, and the CCPA’s need for continuous third-party validation during annual security audits.

The best results come from combining VDPs or MBBs with PTaaS to generate the standardized professional reports and systematic testing to accelerate risk reduction while meeting audit expectations that regulators expect. PTaaS provides certified methodologies and comprehensive coverage of compliance-critical controls (like encryption implementation and access management) that crowd testers might overlook. This combination creates the comprehensive paper trail and systematic validation that compliance officers need during regulatory reviews.

Information security certifications

ISO/IEC 27001 and SOC2 are the leading information security frameworks for organizations that handle customer data. Unlike other regulatory mandates, ISO 27001 and SOC2 are voluntary certifications that organizations pursue to demonstrate security maturity to customers, partners, and stakeholders. 

Both frameworks require organizations to address core security fundamentals:

  • Risk management processes that identify and manage vulnerabilities in key assets
  • Ongoing evaluation of security practices
  • Documented policies and procedures
  • Incident management, including detection, response, and remediation procedures
  • Access controls and data protection to safeguard sensitive information
  • Vendor and third-party risk management to ensure supply chain security.

The key difference lies in implementation; ISO 27001 uses a risk-based approach, requiring organizations to identify information security risks and implement appropriate controls from Annex A (which contains 93 controls across four themes). However, SOC2 specifies five Trust Services Criteria that organizations can choose to meet in whatever way they choose. 

Crowdsourced security practices can help organizations meet both frameworks’ requirements. For ISO 27001, MBBs and VDPs support Annex A controls for vulnerability management (A.8.8). In fact, ISO encourages establishing a bug bounty program to identify security vulnerabilities and share intelligence with the broader security community. In the case of SOC2, these programs demonstrate effective security controls, which can help meet the trust criteria. Additionally, PTaaS provides the independent, continuous third-party validation that both frameworks expect. 

Operational resilience regulations

Several regulations directly target financial institutions to elevate their security posture and strengthen their overall resilience. Noncompliance can result in significant monetary penalties, operational restrictions, and reputational damage. Here are three regulations worth knowing: 

  • Digital Operational Resilience Act (DORA)—Requires financial entities operating in the EU to implement an information and communications technology (ICT) risk management framework, including systems to continuously detect vulnerabilities and emerging threats. They must also conduct threat-led penetration testing of key assets (e.g., payments, communications, and trading) to ensure systems can withstand real-world attack scenarios. All testing results must be fed into a risk management framework for rapid remediation.
  • Network and Information Security 2 Directive (NIS2)—Requires medium and large organizations in critical sectors (like financial services) to implement comprehensive cybersecurity risk management measures, including incident handling, supply chain security, and vulnerability management. 
  • EU AI Act—Requires financial institutions using high-risk AI systems (such as credit scoring, fraud detection, or automated investment advice) to conduct risk and safety evaluations and implement capabilities for human oversight. 

Organizations can use crowdsourced security programs to stay compliant: 

  • VDPs, MBBs, and PTaaS can help meet regular testing and vulnerability management requirements, including analyzing broader supply chains for vulnerabilities. 
  • Red teaming can address the threat-led testing requirement, where a team of security researchers conducts a simulated attack against a company’s technology, people, and processes. Organizations can leverage Bugcrowd’s Red Team as a Service (RTaaS) to easily set up and scale these exercises for ongoing security coverage. 
  • AI Bias Assessments and AI Penetration Testing help evaluate AI systems for bias and protect against emerging AI-specific vulnerabilities. 

If you partner with Bugcrowd and explore all that the Bugcrowd Platform has to offer, results from all these programs can be integrated directly into your software development workflow, enabling real-time monitoring and faster remediation to maintain ongoing compliance.

Bugcrowd: The security platform for financial services organizations

While these regulations vary by jurisdiction and scope, they share a common theme: financial institutions must continuously identify vulnerabilities, validate their security controls through independent testing, and document that issues are addressed quickly and effectively. Traditional point-in-time security assessments can be cumbersome to set up and can swiftly become outdated whenever organizations deploy new code, introduce new assets, or expand their attack surface.

Crowdsourced security, by contrast, was designed for continuous change, making it a natural fit for modern compliance requirements. By working with external hackers and penetration testers, financial services organizations gain unbiased validation of their security posture, along with detailed, audit-ready documentation of findings, prioritization, and remediation actions. These results can be integrated into existing software development workflows, enabling organizations to achieve faster remediation cycles while producing the evidence regulators and auditors expect.

Bugcrowd is the SaaS platform for reducing risk while meeting compliance requirements worldwide—all while adding minimal overhead to security teams. We have over 12 years of experience designing, launching, and improving successful crowdsourced security engagements for more than 1,200 customers across all sizes and industries. Below is an overview of what we have to offer:

  • Personalized hacker matching—Our proprietary CrowdMatch algorithm connects teams with the best-fit hackers from a global network of vetted experts. 
  • Centralized program management—Organizations can launch and manage VDPs, MBBs, PTaaS, RTaaS, and AI security testing all in one place. 
  • Seamless workflow integrations—Native integrations with Jira, ServiceNow, Slack, PagerDuty, and event-based webhooks ensure that findings are quickly remediated. 
  • Low triage overhead—Bugcrowd’s expert in-house triage team validates submissions, prioritizes vulnerabilities, and eliminates noise, meaning security teams can focus on fixing the real issues.
  • Clear compliance proof—Clear, regulator-ready reporting aligned to PCI-DSS, SOC 2, ISO 27001, GDPR, CCPA, GLBA, DORA, and NIS2 provides defensible proof of security maturity to regulators, customers, and partners. 

Ready to learn more? Read the infographic, 5 reasons why financial services organizations need continuous pen testing, to learn how to build programs that address today’s compliance challenges.

*Gartner, Innovation Insight: Penetration Testing as a Service, Mitchell Schneider, Dhivya Poole, Carlos De Sola Caraballo, William Dupre, Eric Ahlm, October 3, 2025. Gartner is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally. All rights reserved.

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