Technology has changed how most industries function, and the financial services industry is no exception. With regulations increasing and automation sweeping the industry, financial companies rely more on their IT systems than ever before. As a financial business leader, you know how important technology is to your business, but how do you determine your specific support needs?
While your business requires the same level of support as those in other industries – like fast help desk response times, technology guidance, and proactive network maintenance – there are additional needs that should be addressed.
Here are the top three most important support needs for businesses in the financial services industry:
- Increased Security Needs for Financial Services Firms
- Why a Business Continuity Plan Is So Important to Financial Firms
- Backup Needs For Financial Organizations
Let’s explore what a partnership between a managed IT services provider and your financial services firm should include.
1. Increased Security Needs for Financial Services Firms
Your financial services company needs IT support just like any other business. But the most significant difference is in the level of security required due to the collection and storage of customer data. As a result, social security numbers, financial data, and other sensitive information are stored on your network and need to be appropriately secured.
The added needs of IT security are twofold.
The first security need includes company-enforced IT standards, and the second is government-regulated. Financial institutions must adhere to these government regulations to stay compliant and keep customer information safe. These laws then become the baseline for security in your company.
You and your IT provider will discuss IT security best practices and how to enforce company standards, along with (and beyond) these government-regulated standards. Implementing a layered approach to security with multiple safeguards in place is the only way to keep your sensitive data and systems safe from an attack.
A large part of regulatory compliance focuses on the security of collected information and its handling. Keeping strict tabs on what data each employee can access helps minimize a business’s risk.
An additional layer of security that significantly reduces the possibility of an attacker gaining access to your data is the use of Multi-factor Authentication (MFA). MFA validates a user’s identity by sending a temporary code through a mobile app, email, or a fob once they enter their name and password. So even if your password were compromised, an attacker wouldn’t be able to gain access without the code.
Safeguarding data that is transferred from one location to another is also essential. This can be done by encrypting the information before it leaves your network or servers.
🔎 Related: 17 Foundational Cyber Security Measures for Southern California Businesses
Auditing for Security and Compliance
Security-related concerns are usually why financial services companies seek an outsourced IT provider for assistance.
Below is a scenario that happens often:
- Company Info: Financial Services Firm “X” needs a security scan or audit for compliance.
- The Goal: To know that their network and data are secure. They want their security vulnerabilities uncovered and then patched, including all hardware and applications.
- IT Provider’s Role: The managed IT services provider would perform a penetration test to find the holes and weaknesses in the company’s network. After the test, the IT provider will create a plan to fix the uncovered issues.
- Long Term Plan: A long-term plan is created with the IT provider to avoid any relapse of critical IT issues. They will then implement weekly and monthly processes to keep all vulnerabilities patched. This process will ensure that they don’t have to re-fix things year after year.
2. Why a Business Continuity Plan Is So Important to Financial Firms
How much would one hour of downtime cost you?
How much would sixteen hours of downtime cost you?
Think about those numbers and then consider how many employees you’d have sitting around not being able to work during that time. How many deals aren’t being worked on? How many clients aren’t being called back? How much business is lost because that loan document isn’t getting sent out?
Those are the questions financial services companies consider when figuring out how much they should invest in downtime prevention.
Identifying Points of Failure for Downtime Prevention
Based on those factors, executives work with their IT provider to create what the IT world calls a redundancy plan.
To do that, the IT provider will start by immediately looking at single points of failure. (FYI, there’s always more than one.) They’ll comb through everything from workstations to power and Internet to design a plan to keep you running in the event of a failure. The IT provider will ask themselves at each step: What can be done to reduce any potential downtime?
From there, you decide how long you can afford to be down.
For example, if you say you’re okay with being down for 4 hours, the IT provider will put together numbers and options to make sure that’s possible. If you say that no amount of downtime is acceptable, they will design a plan for that.
Zero-downtime scenarios are possible, but the shorter the amount of downtime, the higher the cost for the solution. The plan many financial organizations choose comes down to a balance between downtime impact and budget.
Impact of Downtime: It’s Different for Every Firm
We have some financial services clients with hundreds of employees, and if their network were to go down, it would be a huge deal. So we’ve helped them implement redundancy measures to prevent downtime from happening.
These clients have chosen to add failover Internet, two routers, and two firewalls. Basically, if anything fails, the other takes over, preventing downtime. There is also a process in place to reroute web traffic if their filtering system breaks down.
On the other hand, we also have smaller financial companies with 5 or 6 employees as clients. So if they’re down for half a day but they’re still getting email, it’s not the end of the world for them because the impact of downtime on their firm isn’t as high.
Every firm’s tolerance for downtime is different.
Your IT company should evaluate your firm’s unique needs and provide suggestions for keeping your employees working in the event of a failure.
3. Backup Needs For Financial Organizations
Creating a disaster recovery plan and keeping backups of your data is essential, but they do you no good if not done correctly.
Multiple Backups Per Day
It is vital to have a backup that runs multiple times a day. In an industry where speed wins business, you don’t want to risk having to re-do yesterday afternoon’s work because your daily backup ran before those documents were created.
Running your backup multiple times a day safeguards against any missing work.
Testing the Backups
It is also crucial for your IT provider to test your backups and make sure the data can be restored in the event of a failure. Without regular test restores, you don’t know for sure if the backup will work when you need it.
They should also regularly check to ensure that all of the critical information you need to have backed up is actually being backed up.
Backup Retention Time
It’s essential to make sure that there is enough retention time for your backups. Decide on a backup retention time that works best for your business and complies with industry regulations. In some cases, a month is good enough; in others, a few months or even years is necessary. Keep in mind that the longer the retention time is, the more space is needed to store the backups.
Determine how much history is needed, and work with your IT provider to establish a schedule to dump older data. This will help keep down storage costs.
Offsite Backup
Keep a copy of your backups offsite. Maintaining a copy offsite ensures your business continuity in case of a disaster in your office. For example, if a fire or flood destroyed your on-site servers and backups, it would be impossible to get everything back unless your data was also stored offsite.
🔎 Related: Data Backup and Storage Options for Small Businesses
Data Center Regulations
While your business may have its own backup policies, there are also government regulations you must adhere to depending on which sectors you work with.
When selecting a backup data center, they must conform to the same rules outlined by the government when protecting data in-house. For example, businesses that deal with government entities need to store their backups in a data center located in the United States.
Cyber Liability Insurance
Cyber security should always be the main focal point for financial companies. Knowing the whereabouts of your data and your security posture is essential. But one aspect that often gets overlooked until it’s too late is cyber liability insurance.
If you experienced a network breach, how many of your customers would have their data at risk? Would your business survive the financial impact if your data were held for ransom? What would a data breach do to your business’s reputation? Unfortunately, no matter what security measures you implement, no network is 100% safe from attacks – that’s where cyber liability insurance comes into play.
Cyber liability insurance covers the costs of things like paying ransom, data recovery, hardware replacement, and legal defense. Having a policy in place will help your business recover financially from an attack, keeping your doors open.
The good news is that you have a better chance of lowering your premiums by having the security steps listed above in place.
Choosing The Right Provider for Your Business
The one thing all financial services firms need is excellent IT support.
Between the fast pace of the industry, strict regulations, and the need for super-tight security, working with an IT support company that has a deep understanding of the way your business works is critical to your success.
In a technology-driven field like finance, don’t leave security to chance when selecting IT services for your business -- your goals and needs should be at the forefront of the conversation.
Are you ready to have a conversation about taking steps towards compliance, increased productivity, and the growth of your business through technology? We’re here to help!
