For all the benefits of IT acceleration and transformation, it’s not uncommon for businesses to list ‘technology’ as one of their most significant challenges. The evolution of cybersecurity threats, widespread reliance on hybrid work models and multi-cloud platforms, and increasingly demanding regulatory compliance requirements only add further complexity into the mix.
For banks, credit unions and other financial institutions, these modern IT challenges, if not properly planned for and executed, can swiftly derail operations and lead to seismic consequences. In thinking through the effectiveness of your IT operations, consider the following key areas and the challenges they may present.
For too many banking institutions, ‘cybersecurity’ only becomes a serious topic of discussion when it’s already too late. But increasingly sophisticated and disruptive security threats demand a preemptive approach, featuring robust tools and experienced teams that can automate and streamline security processes to enable proactive threat mitigation as well as rapid recovery.
In today’s landscape, basic cyber hygiene can only get you so far; business email compromise (BEC), ransomware and advanced persistent threats are lurking at every turn. Security-forward banks – regardless of their size at the community, regional or national level – should employ proactive monitoring, endpoint protection and intelligent threat hunting practices to mitigate risks before they compromise the safety of customer information – as well as the financial and reputational risk of the bank itself.
Another hurdle to overcome: the need for agility. A one-size-fits-all approach to cybersecurity is ill-suited to banking institutions, who require flexibility to customize and enhance their approach to risk management in order to ward off targeted threats and effectively meet regulatory compliance demands. Elite managed service providers (MSPs) and managed security service providers (MSSPs) should be eager to help you solve your challenges – and do so by delivering customized security services that are uniquely suited to your needs and objectives.
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Banking industry regulators, including the FDIC, SEC, FTC and others, have advised commercial and savings banks for many years on best practices for technology infrastructure, vendor management and cybersecurity protections. But as industry standards have increased, banking institutions are now climbing an uphill battle to maintain compliant cybersecurity practices and execute streamlined, detailed reporting for regulators (and auditors) while minimizing the impact to internal resources.
In May 2022, the FDIC’s most recent cybersecurity ruling went into effect, requiring banks and their service providers to report computer incidents within 36 hours – promoting early awareness of emerging threats to the industry.
These and other regulatory compliance requirements place significant demands on internal teams, who may lack the necessary tools or capacity to carry out regulatory responsibilities. Those who leverage third party support, such as compliance-as-a-service, will find their hill much less steep when it comes to assessing compliance gaps and providing necessary documentation during IT examinations and routine audits.
With banks increasingly reliant on third parties to monitor threats, modernize infrastructures and mitigate financial and operational risk, vendor management has emerged as a critical necessity. But effectively and efficiently assessing new third parties and conducting thorough vendor due diligence demands infinite time, resources and expertise on the part of banking operators. Externally, regulators and cyber liability insurance providers are zeroing in on vendor management as a critical risk area and setting more stringent expectations – demanding that banks facilitate ongoing monitoring, complete periodic third-party risk assessments and maintain current documentation and reporting to support vendor contracts.
Improper or incomplete vendor due diligence practices can severely hinder banking operations and lead to costly and cumbersome effects including regulatory fines, insurance penalties and, of course, increased cybersecurity and IT risk factors.
When it comes to business continuity, there’s no shortage of scenarios that banks and financial institutions should prepare for. From physical and environmental disasters to technology failures and cybersecurity breaches, disaster recovery planning is a necessary element of your bank’s risk management program. But operational resiliency plans need to account for more than simply keeping the lights on.
In looking for proper DR and BCP support, banks should partner with providers who not only provide the geographic diversity needed for a true disaster recovery scenario but also a streamlined cloud-based backup solution and industry-specific expertise to help your bank resume operations in a timely manner.
Of course, another critical piece of maintaining and restoring operations in the face of a disaster is having access to skilled IT expertise 24x7x365 to help ensure available and reliable service for your employees and customers. It sounds basic, but premier IT customer service will be a critical element during a potential disaster situation.
One of the most critical IT challenges banks will face in the coming years is the rapid escalation of digital transformation. For financial services and banking institutions, this means modernizing legacy IT systems, supporting the modern hybrid workforce, and adapting to and securing digital enhancements for banking customers. These improvements will require sophisticated technologies and skilled resources, and banks will need to adapt swiftly to seek out progress in this competitive landscape.
MSPs like Omega Systems can help enable efficiency and scalability across your single- or multi-branch organization and ensure internal operations are designed to support the advanced technologies and convenience consumers expect from modern banking institutions.
Omega Systems has more than 20 years of award-winning experience supporting community, regional and enterprise banks across the U.S. Contact us today to learn more about how we can support, secure and enable your bank for a more successful future.