In the first installment of this series, we explored why incorporating a FIPS-validated cryptographic module into a product does not automatically make the product FIPS 140-3 validated. While understanding validation boundaries is critical, another common misconception often shapes organizations’ decisions much earlier in the product lifecycle. 

Many development teams assume FIPS 140-3 only matters if they plan to sell directly to the U.S. federal government. If federal contracts are not part of the business strategy, validation is often viewed as unnecessary. 

At first glance, this assumption seems reasonable. After all, FIPS standards are developed by the National Institute of Standards and Technology (NIST) for use by federal agencies. However, today’s cybersecurity landscape has significantly expanded the role of FIPS validation well beyond traditional government procurement. 

Myth 2: “FIPS Is Only Required for Federal Agencies” 

Reality 

While FIPS 140-3 originated as a federal security standard, its influence now extends across numerous commercial industries, regulated sectors, and global technology markets. Organizations pursuing FIPS validation are often motivated by customer requirements, contractual obligations, regulatory expectations, and competitive positioning and not by direct federal sales. Many organizations discover that FIPS validation becomes important because their customers expect it, their partners require it, or their industry recognizes it as an established benchmark for cryptographic assurance. 

Why This Myth Exists 

FIPS publications are issued by NIST, and federal agencies are required to use validated cryptography for protecting sensitive government information. Because of this, many organizations assume the standard applies exclusively to government systems. 

However, cybersecurity expectations have evolved considerably. As cyber threats have become more sophisticated, many organizations have adopted established security frameworks originally developed for government use. FIPS validation has become one of the most widely recognized methods for demonstrating that cryptographic functionality has undergone independent testing and evaluation. 

Today, many procurement teams consider FIPS validation an indicator of security maturity rather than simply a government requirement. 

Where FIPS Validation Is Commonly Requested 

Organizations are often surprised by where FIPS validation appears during the sales process. Some examples include:

• Government contractors supporting federal programs,
• State and local government projects,
• Critical infrastructure providers,
• Defense and aerospace organizations,
• Healthcare technology vendors,
• Financial services institutions,
• Cloud service providers, and
• Enterprise software vendors serving highly regulated industries.

In many cases, customers include FIPS requirements in procurement documentation even when they are not federal agencies themselves. As a result, organizations that previously believed FIPS was irrelevant may suddenly discover validation has become a prerequisite for pursuing new business opportunities. 

Beyond Compliance: Building Customer Confidence 

Validation requires independent testing through the Cryptographic Module Validation Program (CMVP) and the result is it provides customers with greater confidence that the cryptographic implementation performs as intended and meets established security requirements. 

For many organizations, validation serves as an objective way to demonstrate their commitment to protecting sensitive information. This can help strengthen customer trust, reduce lengthy security questionnaire discussions, and support purchasing decisions where cryptographic assurance is an important evaluation criterion. 

Planning Early Matters 

One challenge organizations frequently encounter is waiting until late in product development before considering FIPS validation. 

If validation requirements are introduced after product architecture has already been finalized, engineering teams may need to revisit cryptographic implementations, operational environments, documentation, or module boundaries. 

Addressing these considerations early allows organizations to make informed architectural decisions, better estimate project timelines, and reduce the likelihood of costly rework later in the validation process.

For help with planning and guidance, Corsec offers FIPS 140-3 Assessments. These engagements help clarify requirements, outline paths to validation, and give business leaders the information they need to make decisions on validation.

Looking Ahead 

The next installment in this series examines another common misconception: 

Myth #3: FIPS Validation Is Just a Documentation Exercise 

While documentation is certainly an important part of the process, successful validation depends on much more than producing the required paperwork. We’ll explore why engineering decisions, implementation details, testing, and documentation all play equally important roles in achieving FIPS 140-3 validation.