- July 13, 2020
- Tag: Financial Services
Hiring a cybersecurity partner has become a necessity for every organization in today’s climate of increasing cyber-criminal activities. As such, organizations are spending millions to implement and monitor security controls for regulatory compliance. Can organizations leverage their cybersecurity partners in the compliance budgeting process and still be able to strengthen their security posture?
The financial industry is heavily dependent on the internet for day-to-day operations, and such dependence has provided enough leeway for cyber adversaries to make their presence known by exploiting vulnerabilities in their information infrastructure, as the reward is generally worth their efforts. To that vein, data breaches and other cybercrimes have become more common than ever, thereby prompting government and financial industry regulators to develop compliance frameworks, including GLBA, FFIEC, GDPR, etc., to help realign corporate interests with data privacy and security goals and objectives.
Understanding The Balance Between Regulatory Compliance Budgeting and Cybersecurity Risk Mitigation
A financial organization is expected to comply with regulations, industry standards, and it’s own information security policies to best manage cybersecurity risks facing the organization. To meet the financial requirements for the deployment of the above-mentioned cybersecurity governance and compliance controls, a budget must be strategically put in place to ensure alignment between security objectives and business goals. Thus, a cybersecurity compliance budget determines the extent to which an organization adheres to regulatory compliance requirements, how much said is willing to spend, to maintain prolonged compliance while still attending to other business operational requirements.
It’s no secret that a compliance budget can be an expensive affair. In fact, in 2017, statistics showed that 10% or more of banks’ operating costs consisted of compliance-related expenses. By 2020, cybersecurity services are expected to account for nearly 50% of the IT budgets across major organizations. According to the International Association of Privacy Professionals (IAPP), small to midsize in the United States alone spent an average of $1.3 million to meet compliance requirements with a projected addition of $1.8 million in the coming years.
Reducing The Cost of Regulatory Compliance Processes By Leveraging Cybersecurity Partners
A financial organization’s compliance with statutory regulations determines the level of trust it’s customers can have in its capabilities to secure their valuable assets. Therefore, it is imperative for small to midsize businesses to have governance, risk, and compliance (GRC) policies, procedures, and guidelines in place to describe an outlook for achieving a robust compliance posture. In recent years, hefty compliance frameworks, such as GLBA, GDPR, and FFIEC, are known to cause a dent in the scanty resources of organizations.
However, below are a few ways financial organizations can leverage cybersecurity partners to reduce compliance spending while still maintaining a strengthened cybersecurity posture:
- Investing in the ‘Appropriate’ Compliance Framework
Investing in the appropriate compliance framework might sound contradictory to the organizational objective of reducing the cost of compliance, however it is not counter-intuitive because non-compliance is, on an average, 2.65 times the cost of compliance. For example, the amount of penalties organizations could end up paying for not adhering to GDPR can be staggering. However, if an organization does not conduct business with European customers, then GDPR does not apply. Thus, an investment in complying to GDPR might not fit into a desired cost-benefit paradigm for an organization.
Therefore, allocating budgeting to relevant regulations provides an organization with enough room to focus its resources on implementing security controls within areas of the computing environment that are more prone to cyberattacks. posture.
- Providing a Realistic Business Expansion Blueprint For Cybersecurity
Generally, organizations design their compliance policies based on the present state of the business. It might be adequate at the given moment, but it is also a short-sighted approach. The enterprise will eventually scale up, and so will the advancement in technology. There can be an introduction of new compliance regulations in the future. Anticipating them and providing for them at the initial stage can save a lot of costs later on. Adhere to the age-old advice, “Dress for the job you want, and not the job you have.”
Therefore, when developing new procedures, policies, or systems, it is always beneficial to visualize where the organization will be in five to ten years from now. To successfully coordinate such efforts, it helps to estimate if current security controls would suffice in a future computing environment – this is where your cybersecurity partner brings in their experience and adds value in compliance budgeting, thus informing organizations on cost-effective implements of security controls.
- Providing Actionable Plans To Manage Innovative Cyber Risks
Cyber threats are evolving, and new risks emerge overtime. Cybercriminals are an intelligent lot who will manage to find out new loopholes and vulnerabilities to exploit, especially when there is a lot of money involved. Hence, it is better to invest in a cybersecurity policy that focuses on “when” an attack occurs and not “if” it comes. Enterprises focused on providing enterprise security to bring a lot of experience and have the right mix of expertise to deal with cyber threats. Your existing cybersecurity partners can help you in being proactive about emerging cybersecurity and data privacy risks and can help reduce regulatory notifications, thereby cutting the overall compliance costs.
- Automating Compliance Processes
Adopting the latest technology and automating compliance processes ensures a balanced cost-benefit outlook. Many financial services institutions prefer the manual route, believing that they save costs in doing so. However, manual processes can be labor-intensive and error-prone, thus resulting in unforeseen expenses. On the other hand, automation ensures that security controls are appropriately evaluated and reported to allow organizations to take preventive or corrective actions in a proactive manner – organizations end up cutting down costs and strengthening their cybersecurity posture.
- Investing in the ‘Appropriate’ Compliance Framework
While continuing to focus on providing top quality customer services, maintaining a robust data privacy and security posture are paramount especially when it is mandated by regulators. However, attaining regulatory compliance is a very expensive endeavor, especially as technology continues to advance at a rapid pace. Therefore, to ensure that your financial services organization is not overspending or jeopardizing its security posture, it is critical that organizations get cybersecurity partners involved in the compliance budgeting process.
At GoldSky, our expert compliance specialists are capable cybersecurity partners available to provide a well-formulated compliance budget that cuts costs and enable organizations to determine how best to distribute financial resources in a manner that maintains a proactive security posture.