The business landscape today is going through a period of rapid digital transformation in order to remain relevant. But as technological innovation increases the number of devices connected to the network of a highly regulated industry, it can quickly get complicated.
As technology evolves rapidly in the age of ransomware attacks, it can get overwhelming for internal IT departments with a limited resources and staff a. As a result, financial service firms look to managed service providers (MSPs) to effectively implement the right mix of staff augmentation and service providers to get the job done.
Financial firms are now the primary focus of cyber attacks
However, it’s important to understand that not all MSPs are created equal and mistakes can happen. As a result, in a highly regulated industry, it’s imperative for financial service firms to engage an MSP with deep industry knowledge to ensure compliance while simultaneously ensuring that the network infrastructure is effectively protected.
This will be critical going forward!
According to IBM X-Force Research, the financial industry was attacked 65% more than any other industry last year. In fact, this translated into more than 200 million records being breached, a 937% increase year-over-year.
This year, the consumer credit reporting agency Equifax was breached, potentially affecting 143 million Americans. Unfortunately for financial firms, this trend is expected to continue over the next few years.
According to Accenture’s fourth annual compliance risk report, “Compliance: Dare to be Different,” financial firms driven by regulation and emergency risks will continue to increase their spending on maintaining compliance over the next couple of years. Additionally, financial institutions spending more than 5% of their net income on compliance will rise to 40% year-on-year.
According to the respondents in Accenture’s study, the top three compliance risks that financial firms believe will be most challenging over the next year are as follows:
- Fraud and financial crime risk (48 percent)
- Business risk (47 percent)
- Cyber risk (45 percent)
What should financial firms look for in an MSP?
When financial firms engage an MSP, it will be critical to identify one that evidences an in-depth knowledge of the complex compliance challenges financial firms face from regulations set be the OCC, FDIC, NCUA, and Federal Reserve.
For example, an MSP supporting the financial services industry should have deep knowledge about Payment Card Industry Data Security Standard (PCI DSS). This standard is monitored by the Payment Card Industry Security Standards Council. Financial firms are regularly checked for PCI Compliance through tests, scans, and audits.
From an MSP point of view, this means building and maintaining a secure system and network with a robust firewall that will protect cardholder data from hackers.
The MSP will also be charged with maintaining, monitoring, managing, and securing your network. Services may include anything from event log monitoring to intrusion detection and prevention. What’s more, software updates, including anti-virus software, and all related patches need to be actively kept up to date.
The MSP that you partner with will also need to work closely with you to develop your own information security policy and take steps to ensure that it’s actively maintained. For example, this could come in the form of strong access control measures and several security parameters for all stakeholders like having a strict strong password policy.
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