Mandatory or Not? Achieving Cybersecurity Compliance for Financial Institutions

By Brittany Demendi / Adlumin, Inc.
April 28, 2022

Compliance can be a challenge for the financial sector for various reasons. To ensure financial institutions’ credibility and trustworthiness, it has become vital to stay up to date with the latest regulations. To close out Financial Literacy Month, we are taking a deeper dive into a cybersecurity compliance checklist for financial institutions.

Achieving Compliance: What’s out there and what’s required?

Can your financial institution provide your customers with the appropriate amount of security while staying up to date with compliance regulations? There are many cybersecurity regulations and certifications within the financial sector—some are considered “nice to have” while others are mandatory. Let’s look at a couple of options.

  • Payment Card Industry Data Security Standard (PCI DSS) – Security guidelines safeguard your credit card and debit card information. This guideline limits the number of employees who have access to your information and controls tracking account activity. This regulation is internationally recognized and secures information from processing to transferring.
    • Is PCI DSS mandatory? YES, this is a requirement if your organization processes credit or debit card information.
  • Sarbanes-Oxley Act (SOX) – “The Sarbanes-Oxley Act of 2002 is a law the U.S. Congress passed on July 30 of that year to help protect investors from fraudulent financial reporting by corporations,” according to Investopedia. With firmer recordkeeping requirements, strict mandates were set for accountants, audits, and corporate officers.
    • Is SOX mandatory? YES, not just for companies within the financial sector, but for all industries.
  • Gramm-Leach-Bliley Act (GLBA) – “The Act addressed concerns relating to consumer financial privacy. The Gramm-Leach-Bliley Act required the Federal Trade Commission (FTC) and other government agencies that regulate financial institutions to implement regulations to carry out the Act’s financial privacy provisions (GLB Act),” according to the Federal Trade Commission. Financial institutions must inform customers about how they share their data and educate them on their right to opt-out of having their information shared with any third parties.
    • Is GLBA mandatory? YES, it is mandatory for all U.S organizations within the financial sector.
  • The National Institute of Standards and Technology (NIST) – This framework can be adopted by any business and is accepted globally. NIST covers a variety of information security standards, which includes cybersecurity compliance. It is flexible and can be integrated with other regulations.
    • Is NIST mandatory? YES, for all federal entities and their contractors. Also, it is free.

Why are some regulations mandatory vs. optional?

The main issue with cybersecurity compliance for financial institutions is the overlap between different requirements. However, there is a benefit to implementing optional regulations as they can add more security and mitigate cybersecurity risks.

Because of all the overlap and the constant adaptations, fraud, data breaches, and large volumes of data, IT professionals carry a heavy burden. Financial institutions need a managed security services platform that will take away much of that responsibility from their IT teams.

The goal is always to ensure your organization is compliant, regardless of the ever-changing industry landscape. By shifting that burden from your IT teams to a third-party vendor, which is built with that need in mind, your organization will be well on its way to achieving compliance.