Transforming IT Challenges into Opportunities

Financial institutions must take into account the opportunities presented by integrating IT operations with their functions to tackle them hard on.

FREMONT, CA: As different industries are continually and rapidly disrupted by IT accelerations and transformation, it's not astonishing that businesses are listing technology as one of their biggest challenges. The intricacies are brought about by widespread reliance on hybrid work models, cyber security threats, the dependency on multi-cloud platforms, and regulatory compliance requirements which only continue to rise in demand.

In the context of banking, financial institutions, including credit unions, have the opportunity to tackle modern IT challenges head-on, failing which can derail operations quickly and result in tremendous consequences. Taking into account the effectiveness of IT operations, there are multiple areas under which the challenges may present themselves.

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Threat Management and Cybersecurity

As security threats continue to become increasingly sophisticated and disruptive, banking institutions must take a preemptive approach to cybersecurity. This includes robust tools and teams with experience that can streamline and automate security processes to allow proactive threat mitigation, followed by quick recovery. In addition to this, banks, regardless of their regional or national level, should employ proactive monitoring, endpoint protection, and intelligent threat-hunting practices to mitigate risks before risking the safety of customer information, and the reputational and financial risk of the bank itself.

The agility requirement is another obstacle to overcome. If cybersecurity follows a one-size-fits-all approach, it could be harmful to banking institutions, which need to be versatile to customise and enhance their risk management approach, to defend against targeted threats and effectively meet regulatory requirements. Managed security service providers (MSSPs) and elite managed service providers (MSPs) deliver personalised security services, uniquely tailored to address needs and objectives, to help solve challenges.

Third-Party Vendor Management

Vendor management has emerged as a necessity, as banks are continually relying on third parties to modernise infrastructures, observe threats, and eliminate financial and operational risks. However, the comprehensive evaluation of vendors requires a lot of time, resources, and expertise, and it has to be conducted by banking operators. As a result, cyber liability insurance providers and regulators alike are marking vendor management as an area of risk and therefore, are setting strict expectations, stating that banks should undergo periodic third-party risk assessments and maintain documentation and reporting to support vendor contracts.

If not conducted correctly, improper vendor practices can obstruct banking operations and result in expensive errors, such as insurance penalties, regulatory fines, and increased cybersecurity and IT risk factors.

Regulatory Compliance

With the steady rise in industry standards, banking institutions are faced with a steep challenge, which is to maintain compliant cybersecurity practices and simultaneously execute streamlined reports for regulators.

Compliance requirements demand adherence from internal teams, who may not possess the necessary tools or capabilities to implement regulatory responsibilities. Companies that use third-party support, such as compliance-as-a-service, will find that the challenge is not as steep, regarding compliance gaps assessments and providing necessary documentation for IT examinations and routine audits.