The Importance of Network Management Systems in Community Banks and Credit Unions
The advancement of mobile phones, Wi-Fi, remote deposit capture, virtual infrastructures, shared storage and the growing demand from customers to have 24/7 access to their financial lives has changed the business of banking. These changes have shifted the objectives of running a community financial institution away from simply needing to manage money and provide loans to include managing data and the IT networks that carry this information. From the teller line and the loan origination system, to the phone and alarm systems, most modern institutions are highly interconnected and must have a strong IT network infrastructure to offer a variety of services to their customers and keep operations running smoothly.
To ensure all systems are continuously functioning, it is important to monitor hardware and software for failures, viruses and malware, and stay up to date on required maintenance functions. Many IT professionals utilize network management systems to help streamline this process and more efficiently perform their day-to-day functions. A network management system is a set of hardware or software tools that allow an IT professional to supervise and manage the individual components of a network within a larger network management framework. These systems help to provide a deeper understanding of the network and all important applications to help improve performance and ensure security. Having a centralized solution in place that automatically reviews the network, sends alerts, issues tickets, and provides support and reporting for servers, workstations, network routers, switches, software and other devices is an integral and critical function in financial institutions today.
Key Components of a Network Management System for Financial Institutions
To help ensure community financial institutions operate more efficiently, securely and compliantly, IT professionals should implement a network management system designed specifically for financial institutions to further decrease costs, increase performance, and improve their compliance posture.
Some key components of a network management system include:
- Network Device Discovery — the ability to identify what devices are present on a network;
- Network Device Monitoring — the ability to monitor at the device level to determine the health of network components and the extent to which their performance matches capacity plans and intra-enterprise service-level agreements (SLAs);
- Network Performance Analysis — the ability to track performance indicators such as bandwidth utilization, packet loss, latency, availability and uptime of routers, switches and other Simple Network Management Protocol (SNMP) enabled devices;
- Intelligent Notifications – the ability to configurable alerts that will respond to specific network scenarios by paging, emailing, calling or texting a network administrator;
- Mobile and Cloud Support – the ability to offer mobile and cloud support is important for the financial industry because users require 24/7 access to their financial data no matter where they are;
- Integration – the ability to easily integrate with a variety of technologies in place at the institution and work seamlessly together;
- Automated Intelligence – the ability to eliminate the need for IT staff to directly administer challenging and time consuming tasks such as patch management, anti-malware updates, and reporting. Automating these functions saves time while ensuring all patches are up to date. It also reduces the device exposure through server hardening;
- Centralized Monitoring Console – should include remote control access and monitoring capabilities;
- Dual Factor Authentication — enabling secure log-in to the system;
- Enhanced Reporting Functions — featuring reporting based on FFIEC requirements for IT audits; and
- Security services — to protect the institution servers.
All of these features provide IT professionals with greater visibility into the network, increased security of the bank’s servers, and time-saving automation to streamline processes and focus on more valuable tasks. Community banks and credit unions are able to keep up with updates and changes to the system through alerts that notify IT personnel when there is a change or threat to the network. In addition, many network management systems are designed with compliance in mind to account for updates to banking regulations and changes as they occur. This allows financial institutions to stay ahead of the curve and ensure adherence to all regulatory requirements.
Benefits of Outsourcing the Oversight of Network Management Systems
While the evolution of network management systems has made many processes and procedures more streamlined and efficient, the management of network management systems has also become a full-time, demanding responsibility. A financial institution’s IT staff must understand the ever-growing complexity of IT operations and applications, continuously changing regulatory requirements and FFIEC compliance guidelines. IT network administrators must be familiar with the challenges presented by overseeing networks that extend through multiple environments and must also understand concepts such as application delivery optimization and data analytics.
Even though the list of duties and level of complexity has grown substantially in recent years, many community financial institutions still rely on one or two-person staffs to manage all of the institution’s IT operations. Finding, training, and retaining qualified staff to manage an IT network can also demand considerable time and energy from a bank’s management team, which redirects valuable resources needed to support customers and banking operations.
With these mounting pressures, community financial institutions are, or at least should be, looking for ways to more efficiently manage their networks. Often they determine outsourcing this function and the underlying IT operations is the most effective and efficient solution. Community banks and credit unions can benefit in many ways from outsourcing with a provider who offers IT network management solutions exclusively tailored for community financial institutions and are also able to act as an extension of their organization and help augment internal IT resources. Such partners bring knowledge, additional resources and compliance expertise to help community banks and credit unions control and manage their complex IT environments and operate in today’s financial services arena with a greater degree of confidence.
An IT network management provider who is specialized in the financial services industry truly understands the evolving complexity of community banks’ IT operations and will have the knowledge to do an in-depth review of institution’s network environment. The provider can offer additional support in co-managing IT operations, providing financial executives with the assurance that their institution’s IT network is functioning efficiently, optimally, securely, and is in compliance with industry regulations.
A technology service provider can also help consolidate, automate and manage many of the administrative functions that are so time-consuming for in-house staff. Automating patch management and reporting saves bank IT administrators a great deal of time. In addition, providing financial executives the ability to receive live information for diagnostic or reporting purposes, as well as remote access to the network not only saves time and improves efficiencies, but also helps meet the responsibilities of financial IT managers for documenting the environment for regulators.
Compliance Considerations for a Network Management System
Regardless of location and size, banks and credit unions are all subject to largely the same regulations, which are continually changing. Meeting expectations and adequately preparing for an exam are top concerns for many financial institutions. The entire exam process, from preparation to providing accurate responses to reviewing and remediating findings, can be an extremely time-consuming and stressful process to complete. A network management system can help ensure community financial institutions increase efficiencies by automating the myriad of tasks associated with exams and regulatory requirements, and produce custom reports based on FFIEC requirements. Network management systems designed with compliance in mind are able to account for updates to banking regulations and changes as they occur, which allows financial institutions to stay ahead of the curve and ensure adherence to all regulatory requirements.
In addition, due to the volume and sophistication of cyber threats, the Federal Financial Institutions Examination Council (FFIEC) designed the Cybersecurity Assessment Tool (CAT), which plays a major part in helping financial institutions identify risk and understand their cybersecurity preparedness. The CAT provides a clear set of standards to ensure an institution’s network systems are managed efficiently and compliantly. Network management systems help organizations comply with the CAT by offering protections such as risk identification, network border protection, inventory of assets, auditing of the network, dual-factor authentication, and remote access. Failure to comply with FFIEC guidelines puts a financial institution at risk of doing poorly on exams, being written up for not following protocols, and spending large amounts of time correcting violations, which can all lead to reputational damage and loss of revenue.
The New Era of RegTech
Service Provider Considerations
Selecting an IT services provider is challenging and many financial executives struggle with choosing the optimal solution to work with — and truly benefit — their organization. When looking for a technology service provider, some areas to consider include:
- Does the provider offer flexibility in their support services that align with your organization’s IT needs?
- Does the technology service provider have knowledge and expertise of all the regulatory requirements of financial institutions?
- Are their support center staff and system engineers well-versed in network and security technologies, as well as understand the unique technical requirements of your core banking platform and ancillary applications?
Financial institutions rely heavily on technology to deliver financial services to their customers and members. Delivering the right solutions in a timely and cost-effective manner can be a challenge for some. Resources are limited, the top talent is hard to find, and at the same time, network management systems continue to evolve and change, and security risks and examiner expectations continue to grow. Partnering with companies that can provide the tools and resources necessary for financial institutions to help manage technology and reduce burdens, provides greater visibility of the network management system as well as the documentation needed to verify the institution is adhering to regulations.
Ultimately, network management systems that are designed exclusively for community financial institutions can assist in taking the pressure off of increased examiner expectations and the increase in technology complexity. These systems enable community banks and credit unions to thrive in the complex world of banking by continuing to provide the hands-on attention to customers and members that set community financial institutions apart from the competition.