Anyone in the banking industry knows that IT support for banks comes with higher standards.
After all, banks store some of the most important personal data available: Names, addresses, credit and debit card numbers, account values, and more.
Unfortunately, that data makes financial institutions a prime target for cyber crime.
To protect the public, banks must meet higher-than-usual data security standards to protect their customers’ data from being useful to cybercriminals.
Here are three challenges community banks and credit unions face today, and how they can be alleviated through proper IT support.
Legacy systems often present banks with issues related to:
These and other issues can draw heavily on a financial institution's resources, compromising their ability to achieve and maintain compliance.
One solution for banks to ensure compliance would be to upgrade from their legacy systems.
Although only a quarter of banks planned to prioritize technology in 2021, according to an analysis by IndependentBanker.org, banks who do modernize their infrastructure to digital platforms often can scale more rapidly, improve efficiency, cut costs, and stay competitive.
What’s more, banks that have invested in transformative digital strategies like agile methodologies, analytics, and artificial intelligence have only widened the gap between themselves and those who have not throughout the pandemic, according to Deloitte.
Another way to be compliant is to conduct an annual audit. Audits help bank stakeholders reveal gaps in their legacy systems, allowing them opportunities to keep their business data, as well as their customers’ data, safe and secure.
Generally, banks understand they must move to the cloud, and they even plan to do so soon—”more than half of financial institutions expect to run their workloads in a cloud within five years,” according to a survey referenced by IBM.
But banks have been slower to adopt cloud technologies in light of industry regulations.
In general, we believe most banks and credit unions should develop a strategy to move most services to the cloud. Cloud services provide a number of benefits, including:
Cloud providers also offer compliant services for banks, including control and encryption of data in transit and at rest, and location-specific storage, and service level agreements that guarantee your data will be accessible.
As mentioned above, financial institutions have not been as quick to adopt forward-thinking technologies as other industries.
But we would argue that is a mistake.
Without new technologies, banks can take up to 8 months to identify a data breach, according to Varonis.
Further, IBM has found that in 2021, banks are second only to the healthcare industry with regard to the total cost of a data breach. Although the cost of a breach in financial services dropped from 2020 to 2021, a breach in this industry still averages $5.72 million in damages—much more than the investment to be proactive in protecting and detecting cybersecurity incidents.
Community banks and credit unions that invest in digital solutions to detect and protect their institutions from cybersecurity incidents have a much better chance of mitigating an incident’s overall cost, which includes reputation, potential ransoms, and working with both internal and external resources for remediation.
Financial institutions can choose to work with an external cybersecurity services provider to help assess your network for security and compliance. We have extensive experience working with auditors from many firms, as well as examiners from the OCC and FDIC. We also follow guidelines outlined in your financial institution’s due diligence process. For more information about our services, please visit our Financial Services page.