7 Steps to Building and Maintaining Cybersecurity Compliance in The Financial Sector
In today’s advanced threat landscape, financial institutions often face pressure to ensure both cybersecurity and regulatory compliance. With more financial institutions falling victim to cyber attacks, it’s clear that security and compliance should be the two main priorities for financial organizations. Protecting sensitive financial information and personal data requires robust security measures and compliance protocols to prevent exploitation or legal issues.
Establishing a strong compliance framework not only helps financial organizations meet industry standards but also enhances their overall cybersecurity posture. From data encryption to access controls and regular audits, aligning compliance with security practices builds resilience and trust.
Keep reading to review common financial regulations and standards and how to get started in building your unique compliance framework.
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Why is Regulatory Compliance Important for Financial Institutions?
In 2024, two-thirds of financial institutions experienced a cyber attack, with 25% of respondents saying they are not confident that their current security measures would adequately protect their IT systems. As one of the most targeted industries for cybersecurity attacks, financial institutions should prioritize cybersecurity and compliance. Managing large amounts of valuable financial and personal data makes cybersecurity crucial for their success in the financial sector. Protecting the business, customers’ information, and complying with regulations will help prevent threats and foster lasting trust.
Meeting regulatory standards for the financial sector will set organizations up for success. With requirements naturally calling for integration of advanced cybersecurity measures like risk assessments, data encryption, and access control management, financial businesses will be able to both meet their compliance standards and strengthen their cybersecurity.
This combined effort will help financial institutions prevent attacks and recover quickly in case of a breach. Without compliance, financial services companies could neglect cybersecurity as they are not held to any standard, leaving endpoints vulnerable to hackers who can find and exploit them.
Common Financial Services Regulations
Instead of immediately implementing security measures, start by identifying which compliance regulations apply to your specific services. While some companies may need to meet all of these standards, others might only have to focus on a few key ones. By understanding your primary goal first, you can save your team time and money by concentrating on the most relevant standards for your financial business.
The Graham-Leach-Bliley Act (GLBA)
Financial institutions or any organization that offers financial products or services must explain their information-sharing practices and demonstrate the methods they use to protect sensitive data.
The Sarbanes-Oxley Act (SOX)
This set of reporting standards ensures that financial institutions operate with transparency by making auditors more independent to allow them to improve reporting accuracy.
Payment Card Industry Data Security Standard (PCI DSS)
By requiring secure networks, data encryption, and continuous monitoring, this standard helps financial companies protect their customers’ credit card data.
The Bank Secrecy Act (BSA)
Also known as the anti-money laundering law, this act requires financial institutions to keep records of cash transactions involving negotiable instruments and to file reports of daily total transaction volumes of $10,000 or more. They must also report any suspicious activity that could indicate money laundering or fraud.
The FTC Safeguards Rule
Financial firms must develop, implement, and maintain an information security program that includes administrative, technical, and physical safeguards to protect customer information.
After identifying which regulatory standards apply to your organization, you can begin developing your compliance framework. Below are some steps you can take to ensure you operate effectively and efficiently.
Build a Regulatory Compliance Framework in 7 Steps
Building a strong regulatory compliance framework requires a structured, proactive approach that aligns business operations with changing standards. Follow these 7 steps to develop a framework that ensures compliance, enhances security, and lowers risk.
Build a Clear Roadmap
Often, regulations and industry standards overlap, requiring similar measures, security controls, or reports. Since controls and best practices might apply to different situations, it’s useful to develop a roadmap. This helps you keep track of what measures are already in place and how each one meets or falls short of requirements.Separate Compliance From Security
We often see businesses combining compliance with security, thinking they mean the same thing. However, they serve two equally important purposes. Compliance involves auditing current processes and ensuring they meet expectations, while security encompasses measures taken to improve that alignment. Organizations should have separate teams dedicated to each discipline to prevent conflicts of interest.Consider Regulatory Precedent
Since the financial sector has strict compliance requirements, you should first review legislative and court precedents – such as standards related to duty of care and reasonable security practices – to determine what your specific set of best practices should include. Whether you use an in-house counsel or an independent one, they can help ensure your practices and policies meet both regulatory requirements and regulator expectations. This is vital to demonstrate that you take your compliance efforts seriously, which is essential for passing regular audits.Consult Board Members
IT teams can develop processes and offer recommendations; however, if your organization’s board members are not aligned or do not recognize the importance, everything could come to a halt. Before finalizing details, make sure to involve your board members or decision makers to ensure they understand why these processes, protocols, or technologies are being recommended. Once approved, your team can create a plan that emphasizes operational alignment.Implement Automated Compliance Monitoring
Compliance monitoring systems will automate regulatory compliance and alert relevant teams if something appears amiss. With most systems now using AI, some tools will even provide recommendations for fixing detected issues and suggest proactive steps to avoid future problems.Partner With Experts
With a variety of compliance requirements that are constantly changing, it can be difficult for businesses to keep up. Expert assistance, continuous monitoring, and advanced technology tools can help your organization avoid noncompliance. Applied Tech provides access to risk assessments, security audits, and a team of experienced compliance professionals to help you navigate the complexities of financial regulations.Prioritize Proactive Engagement
Instead of waiting for regulations to change, focus on proactive efforts by engaging with regulatory agencies and governing bodies, including the Financial Industry Regulatory Authority.
A well-built compliance framework will grow with your business as goals and standards evolve. By combining a proactive strategy, automated solutions, and expert support, your business can stay compliant and ready for anything that comes your way.
Managed IT Services Partner
Align your technology with your business, reduce risk, and proactively plan to ensure continuity. Partnering with Applied Tech allows you to enhance security measures without depleting your resources.
Access Regulatory Compliance Support with Applied Tech
Maintaining cybersecurity compliance in the financial sector is a complex, ongoing process that demands a clearly defined framework, proactive monitoring, and alignment between security efforts and compliance standards. By following the seven steps outlined in this blog, you can build a clear plan, leverage automation, and engage regulatory bodies to reduce risk and strengthen security.
Applied Tech’s managed IT services offer the expertise, access to advanced technology, and continuous support necessary to integrate new strategies, protect data, and follow standards. Our team of IT and security professionals can help your business create robust security protocols, maintain regulatory compliance, ensure reliable data backups and respond quickly to threats. Partnering with Applied Tech will empower your financial institution to stay ahead of regulations while safeguarding your operations, sensitive information, and customer trust.
Contact us today to learn more about how we, as your partner, can help you build a unique compliance framework to stay ahead of risk and meet your regulatory needs.
About Applied Tech
Applied Tech is a leading IT and cybersecurity services provider dedicated to helping businesses protect their digital assets. Our proactive and strategic services include cloud management, security, productivity, and IT growth strategy. With a team of experienced professionals, we provide unique solutions tailored to your IT needs.
Protect your business with Applied Tech’s fully managed IT services, co-managed support, and security assistance. With IT services focused on your business goals, keep your team productive and your data secure.
