Top 5 IT budget considerations for financial institutions
The current atmosphere is challenging for financial institutions, as increasing regulatory demands and the rising costs of doing business are making profitability more difficult. As your institution begins the budgeting process, your IT framework will likely come under scrutiny, as properly leveraging technology can help you become more efficient while providing necessary security measures. Below are five key questions to evaluate closely during budgeting season to help ensure you stay in compliance and are getting the most from your IT investments.
Is a virtual CIO right for your institution?
With technology utilization a key element in your institution’s efficiency, security, and overall success, the insight and knowledge of a senior technology executive has become essential. However, many institutions either do not have the resources for, or have never hired, an internal chief information officer (CIO) to develop strategy and bridge the gaps between executives and the IT staff.
However, a virtual CIO from an external provider can bring more value than a traditional CIO with less cost, as you only leverage resources and experience as needed. A virtual CIO brings the skills, tools and experience necessary to align technology with your business and compliance needs, without the need for the expenses related to a full-time employee and benefits.
How are you using the cloud?
The cloud presents several opportunities for your financial institution, and you must ensure that you leverage it to its full capabilities. An effective cloud strategy can increase your access and mobility potential, and can greatly enhance disaster recovery capabilities with entire systems and servers or backups securely stored off-site.
A cloud assessment can help your institution determine how you compare to peers, whether you are taking advantage of the most up-to-date cloud services and technology, and how you can potentially utilize the cloud to strengthen security measures, boost efficiency and ultimately increase profitability.
Is your cybersecurity stance effective?
Cybersecurity risks are a significant driver behind many new compliance guidelines, and your technology infrastructure must keep pace to protect your sensitive data. The FFIEC’s Cybersecurity Assessment Tool is a standardized framework to determine whether you have thorough cybersecurity measures in place by assessing your level of inherent risk and also measuring the strength and maturity of your cyber controls.
Read our recent article to learn how to make the most of the FFIEC’s Cybersecurity Assessment Tool.
In addition, to better protect your institution and manage resources, you should implement a layered security approach, viewing your IT framework as an ecosystem. Too often, institutions focus on protecting the perimeter of their technology systems, and add patches or address threats as they are noticed; this approach is not efficient and can result in additional vulnerabilities. Instead, focusing security at multiple layers better detects and remediates threats while increasing efficiency.
Do you have an effective SIEM tool in place?
Institutions need to have tools in place to monitor their network and to identify and respond to suspicious behavior and any unauthorized activity. A Security Information and Event Management (SIEM) framework helps to monitor activity, analyze results and respond to any security events to reduce risks to customers and the institution as a whole.
A SIEM solution is essential to stay in compliance with evolving regulatory demands, but it also enhances several key areas of the institution such as configuration, log and inventory management, as well as application and performance monitoring.
Are your vendor management processes efficient?
Outsourcing has become a widely utilized strategy for all institutions, leveraging vendors for a growing number of processes, including some that handle sensitive customer data. However, regulatory guidelines are becoming more extensive for external vendors, and outsourcing the function does not outsource the responsibility. Vendor strategies are not always efficient, and it’s important to remember that your institution will be held liable for a vendor’s system failures or breaches that expose data.
To improve vendor processes from a financial and regulatory perspective, many institutions are outsourcing compliance responsibilities to an external vendor, or implementing vendor management software. These solutions can help your institution implement more effective, compliant, and most importantly, secure, vendor management processes at a defined and manageable cost.
Your institution should evaluate vendor relationships with a risk assessment, focused on key areas such as:
Performing due diligence on the vendor
Determining whether it has had a cybersecurity review
Evaluating its business continuity plan
Ensuring your institution has the right to audit the vendor
Reviewing cybersecurity documentation as well as any agreements vendors have made with additional third parties that may handle your information.
Remember that your security efforts are only as effective as your weakest link, and that may be one of your vendors.
Read our article to learn more about the three pillars of a vendor management program.
These five elements are important for sustaining your institution’s success, and you must determine how each integrates into your annual budget. Accounting for these issues in advance will help your institution prepare for regulatory and security challenges and avoid unplanned expenses as the year progresses.
If you have any questions or would like to discuss one of these topics in more detail, please feel free to contact Julie Starnes at 319.896.5421.