2023 Bank FailuresMore than $319 billion dollars. That’s the amount of deposits that were put at risk by the historic failures of Signature Bank and Silicon Valley Bank this year. Even after their bailout, they’re still considered by many to be an ominous warning to America’s smaller financial institutions. After all, some reports are showing customers are starting to transfer their deposits from small financial institutions to large ones, for safety’s sake. 

 But does this knee jerk customer reaction spell the doom and gloom some say it will? I don’t think so. 

 All this customer attention and account movement is a great opportunity for your institution to gain market share—especially if you’re already running a best-in-class operation. Remember, for much of America, a “reputable bank” is defined by their own local, community-based financial institutions. So how do you take this difficult moment in our financial history and turn it in your favor? The answer, I believe, is being in a strong financial and operational position already to go after these deposits that are moving around.  

Here at Integris, we’ve devoted a significant portion of our company to helping financial institutions with their IT infrastructure and overall IT department success. So, as you might imagine, I have a lot of advice to offer on the subject. Here are my thoughts.  

 

Step One: Consider Your Digital User Experience for Employees and Customers

When was the last time you considered upgrading your user’s online experience with you? With competition heating up for customers, you can’t afford to ignore the user experience customers have when they get on your customer portal. As an organization you need to ask yourself: 

  • Is my institution offering customers a smooth and seamless online experience? Am I offering them services and access that my nearest competitors aren’t offering? 
  • Have I surveyed my customers recently about what we can be doing to make their online experience with us better? 
  • If we executed a plan to bring on new members, and were successful in that effort, would our current infrastructure be up to the task? Perhaps even more important, would our backup systems be up to the task? 
  • If we add a new services online, how would that affect the rest of our operations? What kind of IT infrastructure would we need to support those new services? If the offering required new tools, how would those tools interact with our code and security measures that we already have? 

Now is a great time to consider these questions, as more and more customers are thinking critically about the safety and accessibility of their money in your systems. An investment now could yield you greater customer confidence in the future. And you can’t put a price on that. 

 

Step Two: Get a Comprehensive IT Gap Assessment Tailored Specifically for Financial Institutions

No matter what your IT governance situation, every financial institution can benefit from a comprehensive IT operational assessment. Ideally focused on the overall operation of the IT department as a line of business in the organization and how mature its processes and procedures are compared to peers and bank specific risk.  

Specifically, a gap assessment is a critical tool to use during your yearly IT infrastructure planning and budgeting sessions. A thorough review can help you: 

  • Plan for predicted hiring or downsizings, so you’ll have appropriate budgetary cover for any new equipment and on boarding/offboarding cost. 
  • Anticipate the obsolescence of tools or equipment that need to be replaced 
  • Match your current tools and endpoints to your user experience goals and upcoming growth 
  • Match your cyber security tool lineup to emerging threats and regulatory asks 

Once you have the results from your gap analysis, you’ll have all the data you need to make a case to upper management. You can set budgets, timelines, development gates, and key performance indicators. It’s the key piece of information you need to get a top line view of your organization— both where you are, and where you need to go. It gives you the ammunition you need to get approvals from the c-suite on your spend. And, when the next year comes, you’ll be able to point to smooth implementation and solid results, because you’ve taken all your real-world obstacles into account before you start. 

Learn More:  IT Assessment for Financial Institutions 

 

Step Three: Level Up Your Cybersecurity Governance with a vCISO

In banking, you’re only as secure as your process. That’s why we believe every bank, no matter what its size, should have some kind of chief information security officer—in addition to your CIO. By having a security focused IT leader, you build an additional, important layer of oversight on your IT operations. In our experience, a CISO acts as a counterweight, balancing out the need to get things done with the need to get things done safely. They should operate independently of your CIO, to maintain an independent perspective.    

Here are some of the services you can expect when you hire a “virtual” CISO (vCISO):  

  • Cybersecurity reporting, creating KPIs that you can share with your board members and regulators 
  • Cybersecurity policy, customized for your bank operation, detailing all your cyber security measures, usage policies, and disaster recovery procedures — a critically important part of your record keeping for all overseeing bodies. 
  • Vulnerability management, through monthly quarterly and yearly oversight of your cyber security monitoring tools. A vCISO can look at these results and see clear patterns and threats emerging before other people will. 
  • Cybersecurity planning and budgeting, which compares the operation you currently have against the regulatory asks coming down the road, and helps you grow your cyber security operation appropriately alongside the growth of your financial institution.  

For many small and medium-sized organizations, hiring a second C-Suite level IT executive is an expense that isn’t realistic. That’s why we offer a virtual chief information security officer service at Integris. This allows you to get the oversight you need without the HR overhead.  

Learn More: vCISO Services  

 

Now Is the Right Time to Take your Financial Institution to the Next Level

  At least in the near term, these recent bank runs will be affecting how customers look at the financial institutions that hold their money. While many say this won’t be good for the smaller bank, I disagree. Community banks and credit unions are the backbones of the communities that they serve. They understand their customers because they are their friends, neighbors, and business associates. They know what their communities need and are in a unique position to provide superior service.  

 Isn’t it time your IT team played a key role in how you deliver that service?   

Interested in learning more? Contact us now for a free consultation. 

Cal serves as Director of Strategic Partnerships for Integris' Financial Institution Division.

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