Why Compliance is Important

Protecting against Cyber threats

The move to digital platforms — one that banks are making by necessity as the demand for seamless online experiences grows amongst customers — exposes financial services to the many potential daily threats they encounter. Based on performance tuning, adherence to established frameworks, such as DORA and the CIS Microsoft Azure Benchmarks, allows organisations to reserve resilient IT infrastructures. These demands also include basic cyber security actions (such as data encryption, incident management and secure access controls), which are proven to reduce the risks and impact of unintended data loss or ransomware.

Penalty fees and legal repercussions

Failure to meet regulated standards can have severe consequences, not just financial but also a critical blow to reputation. The EU data protection authority is likely to impose some penalties if companies do not comply with EU regulations, such as GDPR and DORA. Meanwhile, the FCA's demanding measures around operational resilience similarly require that firms have extensive backup plans should they suffer IT outages, with the threat of hefty fines for those who do not comply.

Building Customer Trust

Customer trust is the most important thing, at least in financial services. Clients expect their data to be secure and their institutions to meet the highest levels of operational resilience. Regulatory IT compliance is crucial for lawful data handling, enhancing the market's confidence in a firm.

Maintaining Operational Continuity

IT compliance frameworks are critical to ensuring that financial institutions remain operationally resilient. This includes ensuring operations can continue during IT system failures or cyber incidents. Focusing on a defined alternative operating model within the DORA and SYSC frameworks leads to robust continuity plans and disaster recovery strategies.

Making It Simpler to Manage IT Compliance

The complexity of IT compliance can be intimidating for financial institutions. Nevertheless, a method with long-lasting success requires a systematic strategy.

Following Cloud Security Standards

Due to the increased uptake in cloud usage by financial institutions, compliance with standards like CIS and Microsoft Azure Benchmarks is also vital. Breaches due to failures in securing cloud environments, lack of data encryption, or multi-factor authentication policies can cause irreparable damage to a business’s reputation and bottom line.

Continuous Monitoring and Evaluation

For many people, this means constantly monitoring and regularly auditing the systems. For example, SEC 17a-4 regulations require financial organisations to preserve electronic records in a non-rewritable and non-erasable format. This highlights why you must conduct regular IT audits to ensure compliance and risk exposure.

Managing Third-Party Risks

Many financial organisations' IT depends on third-party vendors, such as IT support companies, which may lead to further vulnerability points. The FCA and DORA guidelines make it clear that if third-party vendors are used, they should be more closely vetted to ascertain their compliance with the standards in place.

Building a Compliance Culture

Deploying the right technologies is just as important as developing a compliance-centric culture within an organisation. Some of these include better training for employees on IT compliance requirements, cybersecurity best practices, and guidelines that regulators will look for regarding operational resiliency.

Regulatory IT Compliance - A New Dawn

In the future, regulatory IT compliance will undoubtedly change with technological developments. New technologies like AI and blockchain are opening a new world of possibilities, but this also means that the sector can barely innovate freely without some changes in regulatory rules designed to help FIs keep security in check.

Seeing regulations such as DORA on the horizon should encourage financial organisations to establish a plan for ensuring their IT systems are ready for this next step in regulatory standards. This preventative strategy protects their operations and helps ensure they will build deeper relationships with their clientele based on trust.