The Importance of Compliance and Security in Software Development

The Importance of Compliance and Security in Software Development

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The Importance of Compliance and Security in Software Development

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The surge and trend in software development often lead to data breaches, cyber theft, malicious attacks, and other forms of cybersecurity challenges. In the first quarter of 2023 alone, more than six million data records were breached globally. As a result, the need for software development security and compliance becomes crucial, or even urgent. While the former ensures security measures are implemented at every stage of software development to prevent data breaches and malicious attacks, the latter ensures software development complies with a set of global IT security standards and regulations to provide a stronger proof against any form of attack.

This article delves into the details of compliance standards and security requirements for software development.

What you will learn from this article:

  • What is software development compliance?
  • What are software development compliance requirements?
  • Why is software development compliance necessary?
  • What software development security is
  • Understanding security risks when developing software
  • How to integrate and optimize software development security?
  • The risks and consequences of ignoring software development security and compliance
  • Software development compliance standards in specific industries

Understanding Compliance Requirements

types of regulations worldwide

Compliance, as earlier mentioned, is no longer a choice for software developers or organizations, no thanks to the surge in data breaches and cyberattacks. Plus, violating these regulatory compliance and industry regulations calls for fines or sanctions. Therefore, every team in the software development stage and implementation must understand basic compliance requirements. Here are some common regulatory compliance requirements for software developers.


The General Data Protection Regulation (GDPR) is an IT security standard and law for all software developers who deal with the data of European Citizens. The law protects the data and privacy of European Citizens with a set of regulations related to security. One of them mandates all software developers or organizations to request the permission of individuals before using or deleting their data. Hefty penalty awaits defaulters of this regulation, making it one of the strictest IT compliance laws.

ISO 27001

The International Standardization Organization (ISO) and the International Electromechanical Commission (IEC) jointly established ISO 27001 as a set of regulations to manage information security across all international organizations. The compliance requirements involve establishing an Information Security Management System (ISMS), detailing the requirements for creating, deploying, managing, and streamlining the system to forestall data breaches and privacy leaks.

ISO 22301

The ISO 22301 was published by the ISO to ensure continuity in business even after a colossal attack on its data and IT infrastructure. It entails the compliance requirements to plan, create, deploy, manage, review, and regularly streamline a business management system. The goal is to ensure the management system is potent enough to protect the organization against data invasions, respond to such an attack, limit its chances of occurrence, and help the organization bounce back after its occurrence.


The Payment Card Industry & Data Security Standard (PCI DSS) is the regulatory framework that secures cardholder data (debit, credit, and other cards). Every business that obtains, stores, and uses the financial data of clients via online transactions is meant to comply with this regulation for customers and investors to trust them. The compliance standards are also necessary for online payment software developers during the development and implementation stages of the software.


The Health Insurance Portability and Accountability Act (HIPAA) applies to the healthcare industry, and third-party healthcare providers that handle or have access to the medical records of their clients must ensure compliance. The regulation protects the records or medical history of patients or clients within the healthcare sector. Since technology is now part of everything we do, healthcare practitioners are advised to incorporate the HITECH Act under HIPAA to electronically store and handle patient records while deploying secure systems.


While most of the compliance laws are to protect customer data and that of the organization, the Sarbanes-Oxley Act of 2002 anchors on protecting shareholders from financial fraud and misappropriations in the stock market or corporate financial world. The Sarbanes Oxley Act also applies to businesses going public for the first time with an offer, compelling them to be transparent and comprehensive in all information they feed the public about their shares. The regulation is not international, but exclusive to any publicly traded company in the United States, whether they are owned by US citizens or foreigners. However, the IT department of your organization must maintain compliance with the regulations for storing financial records before complying with the SOX.


The National Institute of Standards and Technology (NIST) was founded in 1901 to guide businesses on the best practices and measures to secure data and avoid the many challenges associated with handling them. In doing so, the regulatory body, through its set of compliance standards, helps you to prevent cases of cyberattacks, data breaches, and reputational damage. The NIST is also exclusive to the United States and foreign organizations doing business in the country.

Compliance standards in specific industries

Compliance in FinTech

Integrating finance and technology may leave some loopholes for cybercriminals to leverage and cause data disasters. Hence, there's a need to establish airtight security protocols to protect financial data in FinTech companies.

FinTech compliance stands out as one of the ways to ensure rigid protection in this critical area of the finance world.

It involves adhering to the compliance standards that oversee data privacy, consumer security in a business process, and the use of technology in the finance industry.

FinTech companies must enforce these compliance standards in their day-to-day business processes to limit the chances of cyberattacks and data breaches. The General Data Protection Regulation (GDPR) and PCI DSS are at the basic level, suitable for FinTech regulatory compliance.

Compliance in HealthCare

The healthcare industry has its share of strict regulations, standards, codes of conduct, and federal and state laws to follow diligently. The goal is to limit the risk of patient data loss through data breaches and privacy invasion, maintain quality standards in the industry, and be on the right side of the law.

Some of the common healthcare regulations that developers must adhere to when creating healthcare application software include the Health Insurance Portability and Accountability Act (HIPAA), Health Insurance Technology (HITECH), and General Data Protection Regulation (GDPR).

In complying with these regulations, they must deploy resilient security protocols such as high-end encryptions, high-level authentication (including two-factor authentication), and other strong firewalls during development.

These security requirements are to ensure data transmission isn't breached or eavesdropped by unauthorized third parties and that the software is protected from malicious attacks.

Similarly, the apps should be able to detect potential data breaches via suspicious activity and inform the backend team for immediate action.

Compliance in HRM

Human Resource Management (HRM) compliance ensures an organization adheres to the applicable laws and regulations of federal, state, and international labor regulatory bodies in the workplace.

The organization achieves this by setting up standard procedures throughout its operations with employees to align with these labor laws.

On the side of technology, HRM software developers must maintain compliance with the GDPR to ensure employee data are secure across all HRM software, such as:

  • Applicant Tracking System (ATS)
  • Payroll Software
  • Human Capital Management (HCM)
  • Human Resource Information System (HRIS)
  • Performance Management Software

Compliance in LMS

Today, many organizations and educational institutions deploy Learning Management System (LMS) software applications to plan, execute, and review specific learning processes. The applications assist instructors in effectively creating and delivering lectures, streamlining the learning process for students, carrying everyone along, and fostering development in an organization.

From onboarding and training new employees to the development and retention of existing staff, LMS software applications are invaluable.

In developing these resourceful applications, developers should consider the following two standards and adhere to them:

  • Sharable Content Object Reference Model (SCORM) - To ensure all standards and specifications for e-learning websites and apps are followed and packaged into transferable ZIP file format, helping the user or learner enjoy seamless interaction with the host software.
  • Experience API (xAPI) - To ensure the LMS or e-learning software monitors and records different learning experiences from even non-browser activities like playing games and enables users to transition from desktop platform to mobile while learning, among other streamlined benefits.

Compliance in Collaboration Software

Collaboration Software facilitates seamless collaboration and communication between freelancers and clients, employers and employees, and two businesses to drive growth and massive return on investments.

However, collaboration implies data and information sharing, necessitating collaboration compliance on software developers to protect this data that alternates between both parties.

Hence, certain regulations of international and regional repute should be considered when developing collaboration software. These include the following:

  • GDPR
  • SOX
  • ISO 27001 and 22301

What Are the Security Risks When Developing Software?

software development security risks problems

Software Development is anything but easy, with a handful of challenges and risks. These risks are quite sneaky and can be found anywhere in the software development lifecycle. Failure to detect them and avert the risks they pose may lead to remarkable loopholes in the software, giving cybercriminals the wiggle room to invade.

Understanding the risks and challenges in software development can provide the right footing to tackle them head-on and help developers pay more attention to compliance standards. Here are some of the common challenges and risks software developers face in the arduous task of creating software.

Infrequent or Poor Maintenance

Maintaining your software regularly is critical to its security and lifespan. The maintenance involves security testing to discover vulnerable spots and regular security upgrades to close these loopholes. If done once in a while, the software becomes vulnerable to malicious attacks. Software development doesn't stop after the app or software rolls out to the end user. It's a continuous process, and that's the only way it stays durable.

Legacy Software

Legacy systems are just trouble for developers. They are mostly outcrops of outdated technologies that leave them prone to cyberattacks. They are also not updated regularly - another problem. Hence, software developers go through the rigorous task of updating them to integrate with contemporary secure systems and might risk losing their primal functions.


While compliance is necessary to provide an extra shield against cyberattacks and data breaches and create a robust, durable, and resilient software solution, it has its share of challenges for developers. For some industries like finance and health, there are stringent industry standards you dare not flout while developing any software. They are instituted by federal agencies with the power to impose fines and sanctions at the slightest detection of compromise on the rules. Developers have no choice but to follow the rules to the letter, even when it bites hard on their skills.

Third-Party Integration

Creating software to integrate with third-party apps from a massive pool of vendors is an uphill task. Developers battle compatibility issues, create secure channels for interaction, and comprehensive API documentation to surmount the integration challenge and uphold data integrity in the process.

Weak Systems of Web Services

Web services hold a warehouse of user data and personal information like passwords, and you can't vouch for the reliability of their security protocols. This is good news for hackers and cyber criminals who prey on the weaknesses of web services to steal personal sensitive information from their storage systems.

What are the Risks of Ignoring Compliance and Security in Software Development?

Neglecting compliance and security in software development has dire consequences on the developer and where the software is deployed. Hence, any business owner who stores and handles customers’ data using technology should be aware of the consequences.

ignoring security and compliance

The risks include the following:

Cyber Attack and Data Breach

This is the main consequence of ignoring security and compliance in software development. The software is prone to attack from hackers, open to intrusion from unauthorized parties, potentially leading to data theft. When there's a cyber attack and data breach, there's no limit to what a company can lose before damage control begins and the fire is put out.

Loss of Reputation and Trust

Customers won't trust the business anymore and leave for another. Their data has been exposed and they've probably lost some money (for FinTech). The business owner also reverts to the developer, losing trust and severing ties. Everyone essentially loses.


Federal agencies for data protection will slam fines depending on the regulation you failed to comply with. A regulation like the HIPAA can incur fines from $250, 000 above for a single violation. In 2020 for instance, the French Data Protection authorities fined Google and Amazon $120 million and $42 million respectively for failing to request customer permissions to abandon non-essential cookies.


Customers can sue a business for privacy violations and loss of data in the event of a data breach. These lawsuits could cost a fortune for the business or even the developer via a ripple effect.


When your company loses customers, faces a plate full of lawsuits, spends money recovering data, and experiences a drop in productivity, it's hard not to go broke.

Loss of License

Failing to comply with set rules and organizational standards in software development can lead to the withdrawal of licenses for those in the healthcare and financial sector, fines inclusive.

How to Ensure Security in Software Development? - 10 Best Practices

ensuring security in software development

The consequences of ignoring security in software development have been stripped bare, and it's now time for action. Here are 10 best practices to ensure security in software development:

Lay the Foundation for Security

Don't type the first code without laying the foundation for security. Brainstorm on possible threats to the software's integrity and map out modalities to integrate security at every stage of the software's development lifecycle.

Employee Training

All hands on the development team should undergo special software security training to arm themselves with advanced and updated data security measures. They must create codes in line with these security standards, and know how industry regulations apply to them.

Defined Response Plan

There should be a defined framework to respond to any attack and mitigate the extent of damage. Anything is possible even after ticking every item on an ideal security checklist. The plan should be discussed before coding starts.

Secure Software Coding

Secure coding best practices such as input validation, output encoding, version control, access control, cryptographic practices, password management, and error handling should be deployed. These practices ensure the software is well protected against cyber attacks.

Regulatory Compliance

Adopt global and regional industry regulations in software development. This will serve as a security blueprint for developers in every stage of software development. The GDPR, ISO 27001 and 22301, NIST, and HIPAA are tried and trusted.

Secure the Codes

Unauthorized access to the codes can lead to violations. Protect codes in secure digital bunkers and regulate all access with them, ensuring only authorized personnel have access to them. Changes in the code shouldn't also happen behind your back.

Review Codes

Written codes should be reviewed with consistency to identify lapses and vulnerabilities and cover them early before they advance to the next stage.

Security Tests

Running periodic tests on the software to check for vulnerabilities can help to ensure the software's defensive integrity is intact. It also helps to mitigate risks of data breaches when the software is finally deployed.


Monitoring is like keeping watch at a gate. If anything suspicious passes through, you will be the first to know. The same applies to software, and security breaches can be detected in real time to reduce significant data loss.

Consistent Updates

Regular updates are not meant to improve user experience alone. They help to detect loopholes in the software's security walls and cover them in time. Updates for developers also mean staying on top of the latest trends in data breaches and vulnerabilities in software systems to avoid surprises.

Elevating Security Measures in Software Development

As we stated earlier, adhering to secure coding best practices when building software is critical. These practices guarantee that the code complies with security requirements and is fast and resistant to malicious attacks. The following are some secure coding best practices project managers or organizations should adhere to in software development.

improving security measures in software development process

Offer Security Awareness Training

One of the most important security best practices organizations or project managers can offer their development team of software developers is security awareness training. Organizations can utilize Learning Management Systems (LMS), customized training modules, or Software-as-a-Service (SaaS) platforms to provide in-depth security training. This equips the development team with the knowledge to identify and address security vulnerabilities during the coding phase.

Use Secure Development Tools

Choosing the right development tools significantly impacts the software's security. Tools like "Static Application Security Testing" (SAST) and "Dynamic Application Security Testing" (DAST) help identify vulnerabilities during the development process. Integrating these tools into the workflow ensures that potential threats are detected early, preventing security gaps from emerging.

Identify and Mitigate Vulnerabilities

Regularly assessing software for vulnerabilities is crucial. A comprehensive vulnerability assessment involves analyzing the code, architecture, and infrastructure for potential weaknesses. Once identified, developers can take immediate action to patch these vulnerabilities and strengthen the software's overall security posture.

Conduct Regular Audits and Assessments to Sustain Security

Security is not a one-time endeavor; it's an ongoing process. Regular security audits provide insights into the effectiveness of existing security measures. These audits evaluate the software's resilience to new threats, ensuring that any emerging vulnerabilities are promptly addressed. Regular audits maintain a proactive security approach, reducing the risk of breaches over time.


Security and regulatory compliance in any software development lifecycle are crucial to mitigate the risk of malicious cyber attacks, fines, reputational loss, and lawsuits after deployment. Some of the best, global regulations for software developers to comply with include GDPR, ISO 27001, PCI DSS, HIPAA, SOX, and ISO 22301. As a business owner, you should prioritize security and compliance when deploying any software in your business, and one of the best ways to do this is to partner with software developing companies that are ISO-compliant or have some of the regulatory certifications discussed in this article.

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