Financial institutions are no strangers to audits. For leaders in such organizations, it can feel like all day is taken up preparing for, planning around, and responding to some form of an audit. Nevertheless, adding an IT audit into the mix can pay big dividends in the security department for banks, credit unions, and other financial institutions.
Financial institutions must secure customer information, ensure customer data is disposed of appropriately, anticipate cyber security threats and other hazards that might impact systems and networks, and put controls in place to prevent illicit access and protect the institution and its customers.
There is little question of the importance of these prevention and protection processes as cyber-attack frequency and severity continue to increase, whether it involves extortion, destructive malware, or compromised credentials. Fraud, data loss, or disruption of service are not only disruptive, but also damaging to an institution's finances, operations, compliance standing, strategic planning, and reputation.
For financial institutions to remain Federal Deposit Insurance Corporation (FDIC) compliant, they must implement administrative, technical, and physical safeguards to secure the integrity and confidentiality of information as well as systems and networks. At the same time, many financial institutions must also examine their defense strategies in the context of several other areas of risk management:
An IT audit provides risk assessments considering information technology and cloud platforms, cybercrime threats (including ransomware), and the several available standards like those of the Federal Financial Institutions Examination Council (FFIEC).
An IT audit provides greater insight into the institution's:
As preparedness is so critical, an IT audit is a useful tool to minimize risk and develop cost-effective security programs. Next, we outline the benefits in more detail.
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#1 Risk overview. The audit seeks to identify gaps in the institutions' overall cyber risk. Determining threats to critical systems and sensitive data in advance helps determine what risk management practices and controls are still needed or should be altered or enhanced for greater effectiveness.
#2 Recommendations. An IT audit isn't simply scanning for the negatives. The goal should also be to make positive recommendations that mitigate risk and improve information security controls, risk management, compliance, and governance. The audit report can also help secure C-suite buy-in to address any issues detected.
#3 Peace of mind. There are so many possible areas of compliance concern. Whether it's improper disposal of personally identifying information, lost or stolen devices, lack of training, lack of administrative safeguards, or failure to encrypt information, the regulatory bodies that have no qualms about fining institutions not living up to industry standards. With an audit identifying any shortcomings, the institution's leadership can enjoy greater confidence that corrective action will happen before an agency audit leads to hefty violation fines.
#4 Accountability. IT audits provide the financial organization with a way to effectively communicate to internal and external stakeholders with credibility. With an audit report examining control and security postures, the organization can make better decisions regarding preparedness and how effectively the cybersecurity plan is aligned with risks.
#5 Documentation. The IT auditor's job is to collect and evaluate evidence of the financial institutions' information systems cyber readiness as threats evolve and technology evolves. Understanding systems, networks, databases, encryption and more, the auditor documents the institution's cybersecurity preparedness. This documentation can then be used to:
For all these advantages, financial institutions must remain clear on the limitations of IT audits. Largely done as part of regulatory compliance, the audit is focused on making sure that necessary controls, technologies, and organizational structures are in place. The audit, though, does not actually test the effectiveness of the security framework. Auditors document what's there and what's missing, but they are not going to go any further.
To determine whether the security in place is going to do what's intended, more in-depth testing is required. Known as penetration testing, or pen testing, this approach can build off automated scanning and the audit's assessment to determine potential areas of exploitation. Then, the cybersecurity experts do the work to actually demonstrate, in a safe and controlled way, how the system, network, or premises might be compromised.
Pairing an IT audit with penetration testing in the financial ecosystem simply makes sense.
Recognizing the need for comprehensive cybersecurity detection and protection, RedTeam Security Consulting has partnered with the esteemed technology experts at Boulay Group to offer a new service in the financial marketplace. Combining RedTeam Security penetration testing expertise with all of the advantages of an IT audit provided by Boulay helps our clients meet their regulatory compliance requirements and reduce their information security risk profile.
It's easy to get pricing on our combined IT Audit + Penetration Test for Financial Institutions. Just click here to use our self-service pricing tool to get a quote delivered directly to your inbox.
We look forward to helping your bank, credit union or financial organization strengthen your security posture.