IT Audit or Assessment for Financial Institutions

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October 3, 2023

Most community banks and credit unions must do frequent overviews of their systems— especially if they have an upcoming regulatory review, are updating their cyber risk insurance, or are starting a new relationship with a managed IT service provider. If you’re an IT leader in the financial services industry, it can be hard to know which way to go next. Should you opt for a quick and easy IT Audit or the far more expensive IT assessment your staff or MSP might recommend? Which one should you pick, and how do you even tell the difference between the two?

 

When faced with a choice, we advise our banking/credit union clients to get a full IT assessment—especially if they’re new clients with us. Here’s why: an IT assessment takes a comprehensive look at your IT infrastructure and how it impacts your business goals. You get the best of both worlds with an IT assessment, which offers both technical and strategic insights.

 

What does that mean to you? Let’s drill down on the key differences between an IT assessment and an IT audit.

An IT Assessment vs. an IT Audit:  Why Community Banks and Credit Unions Need to Understand the Difference

 

Both IT Assessments and IT Audits have their uses. An IT Assessment, however, is more useful overall. Here’s what defines each of these approaches.

 

What Can a Community Bank or Credit Union Expect from an IT Audit?

 

Put simply, an IT Audit is a targeted inquiry designed to answer a singular question. Banks often use IT audits when launching a compliance review or evaluating the effectiveness of a particular control or process. When conducting an IT audit, a technical engineer will usually compare the current state of a singular process, platform, or tool against your desired compliance standard or an industry best practice.

 

There are many use cases for an IT audit. Here are some of the common ones we often see:

 

Preparing for a Regulatory Audit

 

Your annual FFIEC (Federal Financial Institutions Examination Council) review is coming, and you need your cyber security operations upgraded to match new, higher standards. An IT audit would examine the new regulations and find your shortfalls.

 

Striving for a New Certification

 

if your bank is going for a particular certification, such as a SOC2 operations center certification, for instance, an IT audit will help you find your system gaps and create a step-by-step implementation plan to reach certification.

 

Managing risk

 

How safe is your customer data? A targeted IT audit could compare your current data handling practices against the local, state, and federal regulatory requirements.

 

Stakeholder assurance

 

Your C-suite is asking for a new round of data analysis about your IT operations. And it audit could answer specific questions that allow you to create new KPIs for your board reports.

 

Incident Response

 

Your community financial institution has experienced a breach or outage, and a forensic analysis has to be done. An IT audit can go straight to the source, identify the damage, and offer a way forward to mitigate the damage.

 

All these scenarios are common, valid, and important. An IT audit for a community bank or credit union is a great way to handle one specific issue. Still, an IT audit is a tactic and one that is generally used once an MSP has begun its working relationship with you.

 

If you need a comprehensive review, an IT audit is a poor and incomplete choice.  When your institution needs more, an IT assessment is worth the extra time and investment. Let’s get into some of the extraordinary advantages an IT assessment can bring.

 

 

What Can a Community Bank or Credit Union Expect from an IT Assessment?

 

 

An IT assessment is a comprehensive review that helps you understand the current state of your IT operations so you can improve performance, security, and manageability. A good IT assessment will do a deep dive into your institution’s infrastructure, helping you analyze your existing systems to identify strengths, weaknesses, opportunities, and threats. While you can choose to narrow your scope to just two areas of cybersecurity or productivity, we recommend that you keep your sights set as broadly as possible. An IT assessment, done right, can completely change the way you look at your IT systems.

 

At Integris, our Financial Institutions Division is nearly 200 employees strong and specializes entirely in providing managed IT services specifically for community banks and credit unions of all sizes. We start nearly every new client engagement with an IT Assessment. We also conduct them with clients that are undergoing major expansions. The information we gain is invaluable for helping align IT operations with the organization’s business goals.

 

 

How an IT Assessment Works for a Community Bank or Credit Union, and What It Covers

 

 

While the assessment process will vary depending on the MSP you choose, you should expect the assessment process to take several weeks and involve extensive visits and fact-finding calls from your MSP’s system engineers and cybersecurity experts.

An Integris assessment for financial institutions usually takes about four to six weeks. During this time, our engineers comb through all aspects of your IT operations, interviewing end users, speaking with clients, assessing your current hardware/software lifecycle, reviewing your capacity levels, testing backup strategies, and more. We look at where you are and where you want to go, then compare those goals and processes against best practices for other high-performing community banks and credit unions.

At the end of the assessment process, a gap analysis is produced, showing where your system’s weaknesses and vulnerabilities are. However, a competent assessment should include far more than just a system overview. Your MSP should also present an implementation plan and estimates for addressing those gaps. They should also suggest new tools, platforms, and processes to help meet emerging regulatory and capacity needs.

 

What Kinds of Questions Will an MSP Ask During an IT Assessment for a Community Financial Institution?

 

The amount of hours spent on an assessment will depend on the size of your organization, the complexity of your infrastructure, and how readily available your system documentation is. There are, however, several areas of inquiry that must be addressed, no matter what your institution’s size.

 

Regulatory Compliance

 

Do you have the proper cybersecurity tools, procedures, and reporting for your FFIEC review? Are you meeting the cybersecurity requirements for your cyber risk insurance? How far ahead are you when it comes to regulatory asks coming down the line?

 

Network Capacity and Architecture

 

Does your system have the speed and storage capacity to run all your platforms and functions? Do you have the right server infrastructure/virtualization configuration and the redundancy to back it up? Is it scalable for the future?

 

Cybersecurity and Cybersecurity Culture

 

How well do your current cybersecurity tools measure up against cybersecurity best practice standards for financial institutions? Do you have the proper web/email filters, antivirus systems, intrusion detection, SIEM systems, access management, firewalls, and permissions-based systems? Does your organization regularly invest in and report on your cybersecurity performance? Do you have the proper patching, testing, and written cybersecurity policies?

 

User Experience

 

How well can your employees and clients navigate your systems? Is it fast enough? Are your users able to accomplish all they need to on your systems quickly and conveniently? Is your service level optimal?

 

Lifecycle Management

 

How current are your software and hardware, and do you have compatibility issues looming in your future? Is your schedule and budget optimized for the necessary replacements?

 

Risk Management

 

What are your internal and external risks? What vulnerabilities are inherent in the software and platforms you are using? Have you made the upgrades to mitigate these risks and earmarked enough budget to handle emerging risks?

 

Business Continuity

 

Are you backing up all your data quickly and safely? How long would it take to get your systems up and running in the event of a disaster, and is that recovery level fast enough to keep you from losing service or data? Are written emergency procedures in place so everyone knows their tasks and roles? Is the current system you’re using for backup robust enough to meet your traffic needs as you grow?

 

Staffing

 

Is staff augmentation needed to achieve your internal IT service goals? Is your issue resolution timeline in line with industry best practices? What changes or investments must be made to preserve or improve your internal IT structures?

 

Staff Training

 

Does your staff complete regular cybersecurity training, and if so, how well do they score? Are they prepared to work safely on your systems and avoid common phishing and social engineering threats?

 

Third-Party Vendor Reviews

 

How well do your current vendors merge with your existing systems? Are your vendors compatible with the planned upgrades in your systems?

 

An IT Assessment:  Your First Step Towards Strategic IT Leadership

 

When you’re running an extensive IT operation at a community bank or credit union, it can be easy to get bogged down in the workday concerns of keeping your systems running. An IT Assessment can be the first step in freeing yourself from the grunt work and focusing on the big picture.

 

With an IT assessment completed and a finalized MSP contract, you can delegate day-to-day tasks like onboarding/offboarding, lifecycle management, licensing, monitoring, patching, and more. Your IT assessment will set the KPIs for your organization and allow your staff to focus on meeting those benchmarks. An assessment is the key to stepping up your leadership game and leading your bank to greater levels of data safety, productivity, and compliance.

 

Interested in learning more? Check out this free sample assessment, showing you how our assessments are done and what those use cases look like for community banks and credit unions. Ready to take the next step? Contact us now for a free consultation.

Susan Gosselin is a Senior Content Writer for Integris. A career communicator and business journalist, she's written extensively on IT topics and trends for IT service providers like Iconic IT and ProCoders Ukraine, as well as business publications such as Technologyadvice.com, Datamation.com, The Lane Report and many others. Connect with her on LinkedIn.

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