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Getting On Track with Cybersecurity Compliance in Finance

Cybersecurity is critical to the success of both enterprise and growing financial firms. “Financial institutions are leading targets of cyber attacks,” says the Center for Strategic & International Studies. “Regulators are taking notice and implementing new controls for cyber risk to address the growing threat to the [financial institutions] they supervise.”

These regulatory steps are necessary for more holistic, industry-wide protection. But for growing financial firms working towards cybersecurity compliance, it can be difficult to know where to start. As FINRA describes in their cybersecurity checklist, “small firms” must establish clear goals within their cybersecurity programs, including:

  1. Identifying and assessing cybersecurity threats
  2. Protecting assets from cyber intrusions
  3. Detecting when their systems and assets have been compromised
  4. Planning a response when a compromise occurs
  5. Implementing a plan to recover lost, stolen, or unavailable assets

In this article, we identify the most important data protection and cybersecurity regulatory requirements among financial firms, including steps that leaders can take to implement them successfully. We also demonstrate how Option One Technologies can streamline firms’ cybersecurity and compliance initiatives, allowing them to focus on their core business goals.

(Note: Use of FINRA’s checklist does not create a “safe harbor” with respect to FINRA rules, federal or state securities laws, or other applicable federal or state regulatory requirements.)

Common-Sense Compliance in Finance

Cybersecurity technology providers are waking up to vulnerabilities at smaller financial firms—companies that can become new clients to them if approached correctly. “The cybersecurity needs of SMEs have been relatively underserved compared with the significantly larger enterprise segment,” says McKinsey. “That’s a missed opportunity hiding in the open as cybersecurity and the threat of future attacks weigh equally on SMEs.”

Growing financial firms need practical solutions to help them protect their digital resources, user credentials, and customer information. This is especially true for firms with “limited resources to establish a cybersecurity program,” as FINRA describes.

But new challenges and requirements have emerged in response to growing attacks on smaller firms across industries, including finance. According to McKinsey, when companies sought to transition to remote work environments alongside other transitions during the COVID-19 pandemic, the number of attacks grew fourfold across all categories of cyberattacks—including phishing, social engineering, credential theft, and brute force endpoint attacks on smaller companies.

Supplementing a Lack of Internal Expertise

FINRA’s suggestions in its guide reflect these changes. The recommendations are for “small member firms with limited resources,” but they are demanding nonetheless. “The firm may consider working with outside technology help, industry trade associations or other peer groups, their vendors or their FINRA Risk Analyst,” according to their checklist.

Fortunately, company stakeholders at growing financial firms needn’t reinvent the cybersecurity wheel to get their firms on track. Cybersecurity solutions that work for larger enterprises in terms of compliance can also work for small and growing financial firms; they simply must become more accessible. This is possible through partnerships Option One Technologies who can deliver these capabilities via cybersecurity as a Service (CSaaS).

CSaaS Opportunities for Growing Financial Firms

Now, vendors are preparing cybersecurity “packages” for small firms that include managed capabilities delivered via the cloud. These services can include capabilities essential to modern compliance, including cloud-based security, phishing protection, mobile security, and managed detection and response.

Secure access service edge (SASE) solutions are also emerging as offices increasingly support employees who work in decentralized office environments. Establishing security enforcement at the edge ensures all users benefit from comprehensive protection, regardless of where or how they choose to work. It is through these new cybersecurity service offerings that small and growing firms in the finance industry will be able to keep pace with their larger counterparts in terms of cybersecurity compliance.

Applying FINRA’s Guidelines for Growing Financial Firms

Even with MSP support, it falls to business and cybersecurity leaders within financial firms to determine which measures they need for compliance. With that in mind, let’s consider the five goals FINRA describes in its cybersecurity checklist for small financial firms. We will provide basic recommendations on how to address them as part of a compliant cybersecurity strategy.

1. Identify and Assess Cybersecurity Threats

Firms must identify where personally identifiable information (PII) or other sensitive data exists within their systems or other types of digital storage. These might include cloud storage, office hardware, or even employees’ mobile devices. FINRA recommends assigning “risk severity classifications” to the data based on the impact of an attack should that data become compromised: low, medium, and high. (For example, if the loss of one data type renders the firm inoperable, its risk severity would be high.)

2. Protect Assets from Cyber Intrusions

Firms must have cybersecurity controls in place to protect their systems and data from unauthorized access. These might include intrusion detection and prevention systems, firewalls, and authentication measures like two-factor authentication (2FA). Option One Technologies can help small firms identify which cybersecurity solutions make the most sense for their organization and budget.

3. Detect When Systems and Assets Have Been Compromised

Firms must have systems and processes in place to detect when their cybersecurity has been breached. These might include intrusion detection systems, file integrity monitoring, and activity logging. Option One can help small firms set up these detection mechanisms and often provide 24/365 monitoring services to supplement internal cybersecurity staff.

4. Plan for a Response When a Compromise Occurs

Firms must have an incident response plan that outlines the steps to be taken if a cybersecurity breach occurs. This might include notifying appropriate personnel, activating the incident response team, and conducting a post-mortem analysis. Option One will assist to develop their incident response plans and often provide access to cybersecurity experts who can help with incident response planning and activities as needed.

5. Implement a Plan to Recover Lost, Stolen, or Unavailable Assets

Firms must have a plan in place to recover data or systems that have been lost, stolen, or otherwise made unavailable. This might include data backup and recovery solutions, system redundancy measures, and business continuity planning. Option One can help firms restore normal operations, ensure their systems are functioning properly, and patch any security vulnerabilities to prevent similar incidents from happening again.

Preparedness Begins with Your People

In their September 2022 article about security and awareness training, Forrester shares from a recent survey of “security decision-makers” that “56% of respondents either strongly agreed or agreed that compliance is the most important indicator of success.” Indeed, it’s by building an internal understanding of the importance of cybersecurity and compliance—and identifying vulnerabilities in those areas—that financial firms can take their first step towards lasting compliance and long-term cybersecurity resilience.

Partner with Option One Technologies for Cybersecurity Success

Option One Technologies helps growing financial firms close the gap on their cybersecurity vulnerabilities, ensuring their protection and compliance in the long term. Contact us today to learn more about our leading, adaptive cybersecurity capabilities.


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