Zero Trust Implementation Challenges in Financial Technology Organizations: A Systematic Review of Technical, Regulatory, and Organizational Barriers

Abstract

Traditional perimeter-based security model is no longer viable due to financial technology (FinTech) organizations running in hybrid cloud, open-banking application programming interfaces (APIs) and remote workforces. Zero Trust Architecture (ZTA), defined by the National Institute of Standards and Technology (NIST) in Special Publication 800-207, moves away from implicit network trust and toward continual, identity-based verification. The security advantages offered by Zero Trust are established, but their application within banks, payment processors, insurers and digital-native FinTech companies is significantly more complex than it is in most enterprise environments, thanks to legacy core banking systems, complex third-party API ecosystems, stringent and fragmented regulation, and high availability transaction needs. This paper attempts to systematically review the technical, regulatory and organizational challenges that FinTech can face when implementing Zero Trust. The review is based on peer-reviewed surveys, NIST publications, regulatory documents, and industry practitioner reports and highlights evidence of legacy-integration challenges, identity and access management (IAM) at scale, micro segmentation in multi-cloud environments, open-banking API exposure, performance overhead of continuous verification, budget and skills constraints, and third-party risks in the context of new regulations like the EU Digital Operational Resilience Act (DORA) and the Payment Services Directive 2 (PSD2). The review also presents empirical adoption and cost data derived from industry surveys, provides a composite severity evaluation of implementation barriers and recommends an implementation framework consisting of five phases that is specific to financial institutions. The paper concludes by highlighting open research challenges such as lightweight cryptography for constrained payment endpoints, adaptive trust scoring using AI and cross-jurisdictional harmonization of regulatory frameworks.