The role of a community bank and credit union CEO has expanded and now requires a much deeper understanding of technology issues, risks, and regulatory requirements. CEOs are ultimately responsible for the health of the institution, which requires effective oversight of all operations and procedures and ensuring the institution is efficiently managing and reducing risk.
Many risk events arise from preventable mistakes, including: the right security layers not being in place; flaws in transaction processing; flaws in IT solutions and processes; security breaches; and/or outright fraudulent acts.
The CEO is ultimately responsible for ensuring the institution manages and combats these risks. Some key things CEOs can do or implement to reduce risk include:
- Attract and Retain Skilled Staff
The CEO must make sure that the staff has the knowledge to ensure the institution is both compliant and competitive in today’s market. Employees must understand the ever-growing complexity of regulations as they relate to IT operations and ensure the institution remains compliant with continuously changing regulatory requirements and is up-to-date with evolving technology to meet customer and member demands and expectations.
- Implement Information Security Procedures
The CEO must ensure proper technologies and solutions to thwart viruses, spyware, and other harmful threats are installed. This entails overseeing the creation of enforceable policies and processes to both educate employees and protect the institution’s computer infrastructure, networks, and data. Cybersecurity represents a large component of the risk prevention strategy. Ensuring security defenses fit closely with the institution’s long-term goals as well as support the IT and compliance strategies is vital to not only the health of the organization but also in remaining compliant with current regulations.
- Understand Compliance and Regulatory Expectations
Regulators now pay more attention to issues around governance, security, and IT solutions than they have in the past, and they have made clear that it is on CEOs to make sure that the institution is adequately protecting customer or member data, are aware of the institution’s operations, and are following all FFIEC and Gramm-Leach-Bliley Act (GLBA) requirements. The CEO must evaluate risk assessment efforts and security initiatives and establish policies regarding the management of key compliance and consumer risks to ensure the organization adheres to the correct policies.
- Partner with the Right Managed Services Provider
More and more community financial institutions are turning to third-party providers for expertise, services, and IT support. Working with a provider who offers solutions exclusively tailored for community banks and credit unions ensures the institution’s network adheres to its operational, security, and compliance policies and procedures. Partnering with the right managed service provider can also help eliminate redundant resources, reduce existing fixed costs by maximizing capacity and leveraging economies of scale, and can add to existing internal knowledge bases.
CEOs of community financial institutions are continuously looking for ways to more efficiently and effectively manage risk. As a result, they are increasingly recognizing that partnering with a managed service provider that offers a comprehensive network management system, designed specifically for the financial services industry, helps them not only better manage their responsibilities and streamline processes, but reduces their regulatory risks as well.
To gain more insight into how CEOs can reduce risk, as well as other IT management issues for CEOs to be aware of, download our white paper, Top 3 IT Management Worries for CEOs in Banking.