Financial services companies operate under some of the strictest regulatory, security, and operational oversight in the world. Banks, payment processors, credit unions, insurers, wealth platforms, and trading firms require extensive vendor due-diligence before approving any new product or service.
This due-diligence process ensures the vendor’s technology, security posture, financial stability, risk controls, and operational resilience all meet industry and regulatory standards.
For fintech and financial services vendors, due diligence is often the longest and most resource-intensive part of the sales cycle — and the quality of your responses directly impacts whether you advance to procurement, security review, or contracting.
This guide breaks down how due diligence works in financial services, what buyers expect, and how vendors can streamline and strengthen their responses.
Vendor due diligence is a deep, multi-departmental evaluation financial institutions use to assess:
Due diligence is designed to protect institutions from operational failures, data breaches, regulatory violations, and systemic risks.
For a related workflow, see What Is Security Questionnaire Automation?
Banks and financial institutions must comply with frameworks like:
They must prove vendors also meet these standards.
Financial data is considered high-risk. Any vendor touching this data must demonstrate airtight protections.
Institutions need to ensure vendors can withstand:
Financial institutions classify vendors by risk tier.
Higher tier = deeper due diligence.
Any vendor failure can impact customer trust and regulatory standing.
Due diligence questionnaires (DDQs) vary by institution, but the structure is often similar across banks, lenders, and fintechs.
Hundreds or thousands of questions across dozens of categories.
Different institutions ask similar questions but in different formats.
Teams involved include:
Many answers require documentation, not just explanations.
Small gaps or inconsistencies cause follow-up rounds that can stall deals for weeks.
Iris centralizes your security, compliance, and operational documentation — then uses AI to automate responses to due-diligence questionnaires, security assessments, and bank-specific DDQs.
With Iris, financial services vendors can:
Iris instantly populates:
Every answer comes from a single, approved knowledge base.
Security and engineering SMEs only review higher-risk or custom items.
Iris stores:
No more multi-version spreadsheets, email chains, or lost attachments.
Excel, portal exports, PDFs — whatever the bank requires.
Due diligence is one of the most demanding parts of selling into financial services — and one of the most important. Clear, consistent, and complete responses build trust, accelerate the procurement process, and reduce back-and-forth with banking, compliance, and vendor-risk teams.
With Iris, financial services vendors can complete due-diligence questionnaires in a fraction of the time while delivering responses that are accurate, audit-ready, and aligned across teams.
Vendor due diligence is critical in financial services because banks, fintech buyers, and regulated institutions must ensure every third-party vendor meets strict standards for security, compliance, operational resilience, and data protection. Financial institutions handle highly sensitive financial and personal information, so they require vendors to demonstrate strong controls aligned with frameworks like SOC 2, ISO 27001, PCI DSS, GLBA, FFIEC, and NYDFS. Thorough due diligence reduces regulatory risk, prevents data breaches, and protects the institution from operational or reputational harm.
Iris accelerates financial services due diligence by using an AI-powered, centralized security and compliance knowledge base to auto-fill repetitive DDQ content. Instead of manually rewriting answers for each bank or institution, teams can instantly populate approved language for encryption, access control, data flows, DR/BCP processes, SOC 2 summaries, PCI DSS references, and regulatory mappings. Iris ensures every response is accurate, consistent, and audit-ready — reducing SME review cycles and speeding up procurement for fintech and financial services vendors.
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