IT Solutions for Financial Services and Banking

Ensuring data security in financial IT systems is of utmost importance. Any breakdowns can result in expensive consequences. IBM reports that the average data breach cost has increased from $3.86 million to $4.24 million, the highest in the past 17 years. This report indicates a trend in data breach repair costs that may persist.

The COVID-19 pandemic has resulted in a surge in remote work. Unfortunately, this has also led to a rise in data breaches as more individuals access systems outside the office. According to IBM, when IT systems break down due to remote work, the average cost of a breach has increased by $1.07 million compared to pre-pandemic times.

As remote work becomes increasingly common, it’s important to prioritize security measures such as using strong passwords. Unfortunately, compromised login information is a significant cause of system breaches – the most common attack vector. Shockingly, 20% of data breaches are due to weak username and password security. These breaches have significant financial consequences, with an average cost of $4.37 million.

Data breaches can lead to drastic outcomes, such as class action lawsuits, reputational impact, and financial costs due to downtime. But security breakdowns are just one obstacle facing senior IT leaders in financial technology and financial services.

Senior leaders in the banking and financial services industry must prioritize security measures and ensure that their IT systems remain compliant and operational. The financial sector is subject to some of the most stringent regulations in the business and for valid reasons.

Navigating the regulations governing financial products, services, and technologies in the United States can be challenging due to their complexity. The strict compliance rules result from various factors, such as historical precedent, the federalist nature of the country, and national politics.

In financial technology and financial systems, IT systems must operate within a high security, high compliance environment. Achieving this level of operation is a tremendous challenge and may require expertise at the highest levels in an organization.

It’s concerning that over a quarter of financial technology companies need a Chief Compliance Officer (CCO). This could result in a need for more dedicated leadership in strategic planning sessions, which is essential for ensuring compliance. Compliance responsibilities may be delegated to lower-level staff or given lower priority by senior IT leaders with a lot on their plate. The importance of compliance in financial IT systems needs to be reflected in the level of representation it has in the boardroom.

Preventing breaches and remaining compliant are two massive obstacles for senior leaders, but these issues are just the beginning regarding modernization.

Many financial IT systems still rely on older technologies. Legacy infrastructure, such as Cobol or Fortran-based systems, is present in banking, insurance, and other industries. With multiple devices prevalent, employees and customers expect a seamless user experience with data easily accessible from anywhere. Financial organizations must keep up with the latest technology trends to meet these high expectations.

As a modern remote worker, using legacy systems can pose problems. However, allowing employees to log in remotely can also create security issues. This is especially important when the only barrier between a hacker and critical data is a weak and easily exploitable username and password. Therefore, it is crucial to maintain system integrity.

Upgrading an old system to a newer hybrid or cloud-based environment can be challenging. However, adding security, compliance, and other related challenges can become even more complicated. It can all become overwhelming very quickly.

Financial technology is one of the most IT-dependent industries. Banks and other financial services organizations are particularly vulnerable to online threats because their business operations heavily rely on IT systems.

Senior IT leaders responsible for financial technology systems face numerous obstacles, including risks such as fraud, money laundering, terrorist financing, and data breaches.

For senior IT leaders, managing IT risk and transitioning systems to hybrid or cloud-based platforms while complying with regulations can be daunting. That’s why having a trusted partner who can streamline the compliance process is essential. An expert in this area can provide valuable assistance and support.