The day-to-day responsibilities of managing the IT network administration, compliance efforts, and security measures for a community financial institution have grown to be a cumbersome, challenging, and often inefficient process. It is likely that there is not enough people and resources on the team to manage the multiple solutions and responsibilities.

To help combat the limited staff issue, many community banks and credit unions turn to managed services providers that have strategic advisors who act as facilitators and trusted partners to guide technology committees and provide tools to address financial regulatory governance. These advisors have a wealth of banking IT expertise and are knowledgeable regarding regulatory and industry issues faced by financial institutions today. They also serve as a convenient, single point of contact within the managed service provider, and assist by performing the following tasks:

Attend Technology Steering Committee Meetings

Participating in regular steering committee meetings enables the strategic advisor to interact with decision makers and help with deliberation, consideration, and recommendations on IT-related issues. They can help mitigate potential risks that are often overlooked while sharing the knowledge and insight needed to help move the financial institution in a positive direction.

Assist with Strategic IT planning

Strategic advisors have a wealth of knowledge and insight into not only the banking and financial services arena, but the IT solutions needed for a financial institution to be successful. They help banks and credit unions develop a comprehensive plan to ensure the institution is implementing and utilizing the solutions necessary to meet its goals.

Facilitate Responses to Pre-exam IT Questionnaires

The exam process has become a time-consuming endeavor. At the beginning of the exam process, the examiner typically sends a list of items they want to review; certain areas they plan to examine; and items they plan to discuss. This normally includes a list of questions the financial institution must prepare ahead of the review. The strategic advisor works with the bank or credit union to complete the questions to meet examiner expectations.

Provide Updates on Current Trends in Compliance, Technology, and Security

The advancement of technology, online banking services, compliance, and regulatory requirements, have made the business of banking more challenging. Strategic advisors provide knowledge and information to help banks and credit unions stay abreast of all the updates and trends in the industry.

Quarterly System Reviews and Assessments

Performing regular assessments helps the financial institution ensure all things related to IT network technology controls are working and up to date. It also serves as time for the strategic advisor to educate bank personnel on new or changing government regulations and expectations. This helps community banks and credit unions to remain in compliance and be better prepared for audits and exams.

With this type of guidance, financial institutions can gain deeper technology insights and enhance strategic IT planning. Strategic advisors act as an extension of the internal team while helping guide and advise the bank or credit union on initiatives that ensure success today and into the future.

The role of a community bank or credit union CEO has become increasingly complex with responsibilities including oversight of all operations and procedures—no small task in light of today’s rapidly changing technology and security landscape, evolving compliance, and shifts in consumer behavior when selecting a banking partner. Given this, many CEOs are struggling to ensure continuity in this environment, especially working with limited resources and increased employee turnover.

An effective way to do this is to partner with a managed services provider that has a comprehensive network management solution designed specifically for community banks and credit unions to provide expertise, services, IT support and add to the existing internal knowledge bases.

Sustaining Personnel Continuity

The reality is that today, community banks and credit unions must address succession planning, especially as it relates to their IT department. CEOs are tasked with thinking about and planning for redundancy to counter the consequences of key staff leaving and taking that knowledge-base with them—and away from the institution. But true continuity is not limited to a single employee resigning; there needs to be a continuity plan in place to account for when employees take vacation, are out sick, are on short-term disability, or are on maternity leave. Regardless of the situation, a managed services provider can help minimize uncertainty, prevent unnecessary stress, and assure continuity by acting as an extension of a bank or credit union and helping to augment internal IT resources.

Ensuring Technology Continuity

In addition to human capital, technology continuity is a key component of a community financial institution’s success. The advancement of technology, online banking services, compliance, and regulatory requirements, plus the growing demand from customers and members to have 24/7 access to their financial lives, has made the business of banking that much more challenging as it has become more IT-focused. This has made it crucial for banks and credit unions to have a proven technology program and framework in place to ensure that operations continually run smoothly.

Working with a provider who offers IT network management solutions exclusively tailored for the community banking industry provides a level of continuity and expertise that can otherwise be difficult to maintain internally on a long-term basis. Doing so ensures that the financial institution’s network is properly adhering to its operational, security, and compliance policies and procedures.

Continued Adherence to Government Regulations and Compliance

The burden of understanding how an ever-growing list of regulations applies to IT operations is shared across the organization. This pressure can be alleviated by an outsourced provider that truly understands the industry and is able to help institutions better manage their processes in a compliant manner. Taking a proactive approach to network management, for example, gives community banks and credit unions the ability to better stay ahead of new and pending regulatory requirements while effectively managing costs through limited resources.

Change is inevitable for any institution. However, having the ability to withstand change and still meet (or better yet, exceed) customer and member demands and expectations in spite of personnel turnover, natural disasters, technology struggles, etc. is key in today’s marketplace. An experienced managed services provider that offers a comprehensive network management system can go a long way toward ensuring continuity.

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.

In today’s fast-paced, technology driven environment, managing community banks’ IT operations and networks have become a very time-consuming process to execute, especially for financial institutions looking to achieve strong growth, increase acquisitions, and build brand new institutions for their communities. The number of patch updates, reporting requirements, network troubleshooting, and regulatory compliance responsibilities are cumbersome for many IT professionals to handle while also working to keep bank operations running efficiently and seamlessly in various branches and locations.

Creating an Environment for Growth

Many community banks set out to build the best institutions for their communities, and when they’re successful, the next logical step is to expand. Morris Bank, headquartered in Dublin, Georgia, was on a mission to grow by offering more services, more locations, and more opportunities for their customers to thrive. A major challenge for banks that take on this task is ensuring IT operations are implemented and managed effectively, especially during these periods of growth and change, and that the institution is compliant with all regulatory requirements.

Larry Schenck, IT Officer at Morris Bank, realized the bank was already engaged with a provider that could help him more efficiently manage and meet the growing IT needs of the institution. Morris Bank has been a Safe Systems customer for 15 years. Schenck knew that they understood the demands of the banking industry and could adequately support the bank’s IT and compliance requirements. After careful consideration, Morris Bank decided to implement Safe Systems’ NetComply® One IT network management solution in 2016.

As a community bank with limited staff and branches in several locations, Morris Bank relies heavily on third-party providers, such as Safe Systems, to offer new opportunities to streamline processes. NetComply One helps Morris Bank efficiently manage all important network tasks including automated patch management, network monitoring, qualified alerting, and detailed reporting for examiners. Since the bank implemented Safe Systems to manage its IT network, the IT team has been able to focus on more revenue-generating opportunities and market expansions that have led to great successes for the bank.

The last 10 years brought on a lot of change and growth for Morris Bank. The bank grew its total assets from roughly $180 million to $980 million and added seven locations to equal nine branches throughout Middle and South Georgia in Dublin, Gray, Gordon, Warner Robins, Statesboro, and Brooklet. The bank was able to grow so successfully by not only acquiring other smaller banks and their assets but also by opening branches in desirable locations. In fact, after being opened only two-years, the branch in Gray was the fastest growing bank branch in the state of Georgia.

“At Morris Bank, we have a great management team and an amazing staff that enable us to keep growing and continue to provide great service to our customers,” said Schenck. “Our vendors play a key part in our success as well, and working with Safe Systems has helped us to simplify IT processes, meet compliance guidelines, and provide continuity for our internal team and our community as a whole.”

Overcoming Challenges with Network Management

Acquiring banks and branches is a complex process, especially in terms of IT integration. All equipment and systems must be brought onto the same network and operate through the same infrastructure. Compatibility is not always easy, and often, the larger the bank or branch being acquired, the more complicated the task.

One of the bank’s recent acquisitions included three branches with 40 employees; more than 40 workstations; several servers; and additional devices and systems that needed to be set up on the network. First, all systems and devices must be tested for updated patches and antivirus. While this can be a cumbersome task, Safe Systems’ network management system enabled the bank to efficiently manage and complete the process. “Onboarding new machines and getting all systems set up on the network is a challenging task during an acquisition,” said Schenck. “With the reporting NetComply One offers, we can easily see which machines need updates, remedy any issues and have more visibility into the network to efficiently manage integrations.”

In addition to the reporting from NetComply One, Morris Bank relies on Safe Systems’ Strategic Advisors to help them navigate the processes needed to complete integrations. With the knowledge the advisors provide, the bank has been able to complete the challenging tasks of ensuring all systems are working in a compliant manner and all branches are running efficiently.

The patch management component of NetComply One has also been very important for Morris Bank. The bank has approximately 250 computers to manage and keep up to date with patches, which is critical to information security and combating cyber threats. “While Safe Systems manages and provides the patches, they are also very careful to not just arbitrarily patch machines and equipment without proper testing,” says Schenck. “Safe Systems tests each patch to ensure it will work with our current systems and ensure no holes will be left for hackers to exploit.”

Building a Strong Partnership

Morris Bank relies on a number of vendors to offer its customers key products and services that give them more convenience and control. Over the years, they have added additional Safe Systems services, including their Vendor Management solution. This solution enables a more efficient risk assessment and due diligence process, as well as provides the ability to proactively manage vendor renewals, centralize all important documents, and have detailed information to share with auditors, examiners, senior management, and the Board.

“Regulators are more closely scrutinizing the vendor management process within banks, and with Safe Systems’ vendor management solution, we are able to easily provide the proper documentation to examiners in an efficient manner,” said Schenck.

Through its partnership with Safe Systems, Morris Bank has been able to expand its reach in all areas of technology, compliance, and security. The bank receives positive feedback from regulators on its network management and vendor management programs and has enhanced its compliance posture.

“Through the years, Safe Systems has been a valuable and trusted partner to our bank,” said Schenck. “The solutions Safe Systems provide enable us to give our customers a better banking experience as well as a more efficient work environment for our employees. I worry less and sleep better at night knowing we have Safe Systems’ solutions running in our bank.”

The New Era of RegTech

Building Compliance into Your Financial Institution’s Processes

An efficient network environment is important to ensure that bank operations run smoothly, especially for new financial institutions. Preparing a bank for a grand opening involves setting up workstations, equipment, servers and software for the entire organization – all of which can prove daunting for an institution with limited IT staff.

Nicole Rinehart, vice president of Macon, Ga.-based American Pride Bank, quickly found herself in this situation when managing the launch of the de novo bank. She realized she needed assistance and support with the bank’s IT initiatives to get the institution up and running as soon as possible.

“As the only IT person in the bank, I had a big assignment to accomplish getting the bank open and ready for business,” said Rinehart. “I had never dealt with a company like Safe Systems before, but with their professionalism and expertise in the banking industry, I felt that they were a great partner to help us with this project.”

Streamline IT Operations and Compliance Processes

American Pride Bank implemented Safe Systems’ IT network management service, NetComply® One, allowing it to automate a variety of IT functions to ensure its network would be secure and compliant. With NetComply One, the bank can monitor and manage IT compliance and security from one centralized platform; easily receive alerts; provide detailed reports to examiners and Board of Directors; receive network updates; streamline patch management and other manual tasks and obtain expert support from Safe Systems’ team. Rinehart is also able to access the bank’s network remotely to monitor and manage day-to-day maintenance issues that arise.

After the initial set up, the bank switched locations seven months later, and Safe Systems was right there to transfer all of the equipment, servers, and workstations to the new building. The support from the technical engineers made the transition seamless and stress-free for the entire organization.

“NetComply One is a one-stop-shop for technology, compliance, and security,” Rinehart said. “When examiners come into the bank, our audits are flawless because we have thorough, real-time data to share that meets regulatory expectations and shows that our network is functioning securely and efficiently. The platform streamlines our IT processes and reduces the amount of time I spend on manual IT tasks, allowing me to focus on more valuable activities for the bank.”

For more information, download the full success story, American Pride Bank Enhances IT Network Management Processes.

Annual exams and regulator expectations continue to change and become more cumbersome for financial institutions, regardless of size. The entire exam process, starting with the preparation, can be an extremely time consuming and stressful process to complete given the amount of reports and information the bank or credit union is required to provide. To manage this process efficiently, community banks and credit unions must understand what examiners are looking for and be able to streamline processes to ensure the proper documentation is prepared prior to the exam.

The Compliance Challenge

Regulatory agencies are requesting an increasing number of documents and reports even before the exam begins. Financial institutions are usually asked to prepare between 40-100 items for each exam or audit and institutions have between 11-20 exams per year, making exam preparation alone a cumbersome, full-time task, and one that can be overwhelming for a financial institution with a small IT department. This doesn’t even take into account the amount of time spent providing accurate responses to requests and reviewing and remediating findings.

Some of the reports requested by government agencies include:

• Documentation of patch management programs;
• Vendor management program reports;
• Network Vulnerability Scan reports;
• Back-up verification and reporting;
• Inventory and auditing logs;
• Remote Control Logs;
• Training logs;
• Detailed Executive Summaries; and
• Security Control Logs and Verification.

With limited resources, many community financial institutions struggle to efficiently meet examiner expectations and provide reports that are timely, accurate, complete, and consistent.

Automate the Network Reporting Process

Community financial institutions are looking for ways to better manage their regulatory reporting requirements. To help streamline this process, financial institutions are implementing a network management system with an automated reporting function that allows institutions to easily configure, customize and generate reports to meet examiner expectations.

A comprehensive network management system designed specifically for financial institutions can help the IT department quickly produce and effectively manage custom reports for exams. Having a solution that automates IT reporting based on FFIEC requirements, helps banks and credit unions to more efficiently prepare for exams. In addition, increased visibility to the network helps IT managers simplify processes and provide proper documentation to examiners.


Remaining in compliance with government regulations is a consuming responsibility for institutions of all sizes. Regulatory agencies are continually changing and increasing the amount of reports they require. To help ease this compliance challenge and streamline reporting activities, financial institutions should adopt applications that will increase efficiencies with automation.

The threat to network systems has increased significantly over the last few years, and the consequences of a breach can be potentially disastrous for organizations and individuals alike. Due to the volume and sophistication of cyber threats, the Federal Financial Institutions Examination Council (FFIEC) Cybersecurity Assessment Tool (CAT) plays a major part in helping financial institutions identify risk and understand their cybersecurity preparedness. To better protect the network, financial institutions must understand where their security practices fall short and how to effectively address those gaps. The CAT provides a clear set of standards to ensure an institution’s network systems are managed efficiently and compliantly.

 
Some key areas of network management that are addressed in the CAT include:

Risk Identification

There must be documented processes that outline potential threats and vulnerabilities. Risk identification activities that determine the institution’s information security risk profile, including cybersecurity risk, must be documented and evaluated on a routine basis.

Network Border Protection

There must be effective preventative controls in place to adequately protect the network from attack. This includes firewalls, anti-virus protection and anti-malware software.

Inventory of Assets

An updated inventory of technology assets including hardware, software, information, and connections should be maintained. The inventory should include where all assets are stored, transmitted and processed.

Auditing of the Network



Financial institutions must have the ability to identify what devices are present on a network; 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). It also includes 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.

Dual-Factor Authentication

The system must have more than one form of authentication in order to access it to ensure a secure log-in.

Patch Management

An effective patch management program is a must in today’s environment. All software applications require updates from vendors to remedy weaknesses. Updates should be rolled out to all devices in a timely manner, updates should be tested to ensure they don’t create an issue for the institution’s applications and all patches must be well documented.

Remote Control Access

Remote access to a network allows employees to connect to any machine in their network via encrypted and logged sessions. It gives administrative personnel the tools to administer and manage a network, enabling increased productivity, heightened security, greater flexibility and centralized control that’s accessible from anywhere they have an Internet connection. While this is beneficial, it must be monitored and protected from outside attacks.

Reporting

Financial institutions must be able to generate and provide easily configurable, customizable and accurate reports for all exams and audits in a timely manner.

Consequences of Not Being in Compliance

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 remedying violations, which can all lead to reputational damage and loss of revenue. Regardless of location and size, banks and credit unions are all subject to largely the same regulations. Governing agencies have become more stringent in their exams in the last several years and have been liberal in issuing citations to community financial institutions that have lapses or are not meeting regulations.

Automating Network Management

To help ensure community financial institutions operate more efficiently, securely and compliantly, IT professionals are implementing network management systems designed specifically for financial institutions and their compliance needs. These systems help to further decrease costs, increase performance, and improve their compliance posture by automating the myriad of tasks associated with exams and regulatory requirements. Systems with built-in automated intelligence eliminate the need for IT staff to directly administer challenging and time-consuming tasks such as patch management, anti-malware updates, and reporting.

Automating IT activities helps ease the burden of maintaining network compliance. Remember, while compliance requirements can be cumbersome and time-consuming, these standards are in place to ensure that sensitive, financial data is protected from the malicious threats and attackers who seek to exploit it.

A strong patch management program has many important components. It starts with identifying the right patches, implementing a patch schedule, deploying patches, and ensuring all patches are effective and working correctly. However, one critical but often-overlooked component of patch management is the actual testing of all patches. Testing patches before they are implemented is crucial to ensure that they will not wreak havoc on your machines, servers or networks and cause disruptions in your IT environment, not to mention impede customer service.

Patches are constantly being released, making testing an on-going action item for financial institutions to ensure their network and organization are protected. Testing can be a time-consuming task, requiring, hours, days or weeks, depending on the updates provided and criticality of the system to be patched. On the other hand, the cost of having to repair damaged software and network systems due to untested patches can be significant.

Effective Patch Management and Testing

Financial institutions cannot blindly install patches without understanding the potential impact the update will have on the institution’s network. Doing so can result in the elimination of key features in bank systems, incompatibility with critical functions, and even the removal of important data and financial information. Once patches are installed, it can be difficult to revert back to the older version.

All software applications require updates from vendors to remedy known vulnerabilities or security weaknesses, not just operating systems. This includes updates for third party software programs such as Adobe Acrobat®, Adobe Reader®, Adobe Flash®, Java™, Chrome™, and Firefox®. All patches should be tested in an environment that hosts the same critical applications, including business applications, servers, network systems and all the key applications unique to the financial institution. The goal is to replicate the whole environment as much as possible to determine the potential complications and outcomes for each patch.

Streamline Patch Testing

To help streamline the testing process and ensure all patches are thoroughly tested, Safe Systems has established one of the largest test groups in the United States focused on the financial services industry. The test group consists of more than 1,000 devices in real-world environments, ensuring that when a patch is approved for full deployment, the financial institutions system’s operations and applications are not impacted and business is not interrupted.

Having the support of an outsourced service provider testing all patches crucial to your institution ensures you have a comprehensive patching program that is guaranteed to deliver quick, accurate, and secure patch updates to all workstations and servers. This process will help mitigate the multiple risks associated with running unpatched and untested programs and automate the time-consuming process of testing and deploying new patches.

A lack of effective patch management and testing has contributed significantly to the increase in the number of security incidents in financial institutions. Adequately testing every possible configuration is a necessity for all financial organizations to protect against data breaches and other malicious attacks. Working with a third-party service provider to assist in the testing phase can save your organization countless hours; eliminate the headache of having to fix incompatible patches; and ensure software is up to date, resulting in a secure environment.

When The Peoples Bank of Georgia’s outsourced IT provider retired and sold the business to another company, the staff was faced with the challenge of working with a provider who did not specialize in banking. This led Jessica Keller, Information Technology Officer for The Peoples Bank of Georgia, to search for a service provider who truly understood her bank’s IT operations; one that could successfully manage its compliance requirements; and one that had the expertise to monitor and manage the bank’s network efficiently.

Experienced and Knowledgeable Third-Party Provider

Keller learned about Safe Systems through attending banking industry conferences and through recommendations from her peers. The bank selected and implemented Safe Systems’ NetComply® One IT network management solution to efficiently manage all important network tasks and provide proper documentation to regulators for IT examinations. NetComply One also enables the bank to automate patch management; receive qualified alerts; and obtain detailed reports.

“As a small community bank, we needed a service provider who could guide our institution’s IT projects, efficiently manage compliance, regulatory requirements, reporting and act as an extension of our organization,” said Keller. “Safe Systems’ expertise in the banking industry, their ability to work with regulators, and the automated reports they provide, made them the ideal partner for our bank.”

Compliance and Regulatory Expertise

After NetComply One was installed, the bank’s staff was able to more efficiently manage all important network tasks, ensuring proper documentation to regulators for IT examinations. “Implementing the NetComply One solution has made significant improvements in examination preparation and management for our entire network,” said Keller. “I no longer have to spend time on manual processes and can now focus on more valuable tasks and activities. Safe Systems is a true partner who understands the banking industry and acts as an extension of our organization, enabling us to ultimately better serve our customers.”

For more information, download the full success story, The Peoples Bank of Georgia Enhances Compliance and IT Network Management Processes with Safe Systems’ NetComply One® Solution.

Patch management has become more important than ever for financial institutions as the lack of an effective program has contributed significantly to the increase in the number of security breaches. The most popular software products are tested by hackers for weaknesses, and vendors have to constantly release security updates to keep these applications safe and secure. However, monitoring and managing patches can be a cumbersome, time-consuming process, especially for community financial institutions with limited IT staff.

This was the case for Rick Johnson, assistant vice president of IT at First National Bank in Olney, Illinois. He was spending a significant amount of time on patch management. In fact, it had nearly become a full-time job, and the bank was looking into hiring additional personnel to assist the IT department with this task. This led Johnson to search for an outsourced service provider who offered a comprehensive automated patch management solution designed specifically for community financial institutions.

“Maintaining patches became a very time consuming task for me, in addition to my other responsibilities at the institution,” said Rick Johnson. “We are in a rural location, and it was extremely challenging to find someone who could manage the network, understand compliance policies, and maintain patches in a timely manner.”

Automated Patch Management Solution

First National Bank in Olney selected Safe Systems’ NetComply® One IT network management solution to efficiently manage all important network tasks including automated patch management, network monitoring, qualified alerting, and detailed reporting. In addition, the bank utilizes the Security Baseline Service that is built into NetComply One and is designed to help streamline the essential task of maintaining server hardening by automating the process, including a testing phase and ticketing notification.

“To ensure the security of our network and successfully meet examiner expectations, we needed an outsourced provider who could support our IT initiatives and offer insight on compliance updates and changes,” said Johnson. “NetComply One ensures that we are up to date with our patches and other IT functions, so we can focus on more revenue generating activities at the bank without having to add extra staff. Since implementing Safe Systems, we have increased network performance and improved our overall compliance posture.”

For more information, download the full success story, First National Bank in Olney, Illinois Improves Patch Management and Compliance with Safe Systems NetComply One® Solution.

With the Federal Deposit Insurance Corporation’s (FDIC) InTREx program, recent updates to the Federal Financial Examination Council’s (FFIEC) Cybersecurity Assessment Tool (CAT), and other regulatory expectations, financial institutions have a large responsibility to keep up with the evolving compliance landscape. While these laws and requirements were designed to improve risk controls, maintain capital and create a more transparent financial sector, many financial institutions have found managing regulatory compliance efforts is a resource consuming, expensive inefficiency.

These complex regulations, coupled with the increased use of technology within financial institutions, are forcing community banks and credit unions to find new ways to manage risk and remain compliant. The need to streamline compliance processes across the board has resulted in the development of a new technology product category: regulatory technology or RegTech.

RegTech Fills Compliance Gaps

While the financial services industry has made significant strides in the use of technology solutions, many have not adequately addressed regulatory issues and expectations, which has led to institutions performing manual processes to maintain compliance.

RegTech helps solve this issue for financial organizations by automating compliance tasks, reducing operational risks, streamlining reporting processes, and providing better oversight of their data. RegTech refers to a set of companies and solutions that address regulatory challenges through innovative technology in the financial services sector. This technology empowers organizations to make informed choices based on the actionable data provided through the systems. This data highlights the compliance risks the organization faces and how it mitigates and manages those risks.

While traditional solutions can be inflexible and require configuration when changes or enhancements are needed, RegTech solutions are agile and can easily keep up with the quickly evolving regulatory landscape. Using advanced technologies and analytics tools that extract, load and analyze data in a timely and efficient manner, financial institutions have the ability to stay up-to-date with regulatory and compliance guidelines and expectations, avoid costly fines, and save money by reducing the need to manually dredge through data.

RegTech has the potential to continually monitor capacity, provide close to real-time insights through deep learning and artificial intelligence filters, and identify problems in advance rather than simply taking enforcement action after the fact. Identifying potential threats to financial security early enables financial institutions to minimize the risks and costs that are associated with lost funds and data breaches.

Characteristics of RegTech Solutions

By automating compliance processes, RegTech solutions are truly addressing a gap in the financial services market. Some key characteristics of RegTech solutions include:

• Combined use of real-time information with algorithms and analytics as well as even social media and biometrics, which has transformed how customer due diligence is done and how anti-fraud measures are determined;
• The agility to combine complex information from banks and regulatory agencies to automate the prediction of potential risk areas;
• Customizable and easy to integrate into a variety of environments;
• A reporting function that allows institutions to easily configure, customize and generate reports to meet examiner expectations; and
• A cloud-based solution to help financial institutions maintain, manage and back-up data remotely, while ensuring all data is secure in a cost-efficient manner.

According to research by FinTech Global, investment in RegTech has more than tripled over the last five years. Since regulators are now demanding a higher level of transparency, technology solutions that streamline this process are of the utmost importance. When community banks and credit unions are able to simplify regulatory processes, compliance costs are reduced and the bank’s staff is able to decrease time spent on manual tasks. Ultimately, this increases the effectiveness and the efficiency of compliance efforts which leads to more flexibility and new growth opportunities for financial institutions.

For more information, download our white paper, The New Era of RegTech: Building Compliance into Your Financial Institution’s Processes.

The New Era of RegTech

Building Compliance into Your Financial Institution’s Processes

Community banks and credit unions are growing accustomed to the strenuous regulatory reviews they must go through each year. However, they continue to struggle with managing an evolving set of government regulations and guidelines. In fact, according to the 2018 Community Bank and Credit Union Information Technology Outlook survey we conducted in the fourth quarter of 2017, 32% of respondents claim this is currently their greatest IT compliance challenge. Audits and exams, including internal audits, are designed to help ensure a financial institution’s environment is sound and compliant and that daily practices are in line with those standards. As a result, 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.

Preparing for an exam has evolved into a time consuming task. Agencies are requesting an increasing number of documents and reports before the exam even begins. According to survey results, approximately 60% of respondents were asked to prepare more than 40 items for each exam or audit; and 31% of respondents indicated that they were tasked with preparing up to 40 items. With 48% of survey respondents preparing for and responding to between 11-20 exams per year, exam preparation is becoming a full-time task, one that can be overwhelming for a financial institution with a small IT department.

With these limited resources, many community financial institutions struggle to efficiently administer IT tasks and meet examiner expectations. To counter these mounting pressures, community financial institutions are looking for ways to more efficiently manage their networks and meet regulatory requirements.

Automating Exam Prep and Reporting

To help ensure community financial institutions operate more efficiently, securely and compliantly, IT professionals are implementing network management systems designed specifically for financial institutions to further decrease costs, increase performance, and improve their compliance posture. Utilizing such applications will increase efficiencies by automating the myriad of tasks associated with exams and regulatory requirements. Systems with built-in automated intelligence eliminate the need for IT staff to directly administer challenging and time-consuming tasks such as patch management, anti-malware updates, and reporting.

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. A comprehensive network management system can also automate, produce and manage custom reports for exams. Having a solution in place that automates reporting functions and requirements and is able to produce custom reports based on FFIEC requirements makes preparing for exams more efficient. Increased visibility to the network helps bank IT managers streamline processes and provide proper documentation to examiners. In addition, providing financial executives with the ability to receive live information for reporting purposes not only saves time but also improves operational efficiencies.

Regardless of location and size, banks and credit unions are all subject to largely the same regulations, and regulatory agencies are continually changing and increasing guidance requirements. It’s also no secret that governing agencies have become more stringent in their exams in the last several years and have been liberal in issuing citations to community financial organizations that have lapses or are not meeting regulations. Meeting expectations and adequately preparing for an exam are top concerns for many financial institutions. To help ease these compliance challenges and streamline compliance-related activities, financial institutions should adopt applications that will increase efficiencies with automation.

2018 Community Bank IT Outlook

Primary Research and Analysis of Your IT Priorities in 2018

To manage complex IT networks, bank and credit union IT administrators need the proper tools to monitor the network, maintain patches, apply anti-malware, and troubleshoot network issues effectively. With constant technological change and increasingly strict regulatory guidelines, many community financial institutions struggle to efficiently administer these tasks and meet examiner expectations.

To counter these mounting pressures, community financial institutions are, or should be, looking for ways to more efficiently manage their networks. Often, outsourcing this function and the underlying IT operations proves to be the most effective and efficient solution, but some financial institutions are hesitant to outsource or have misconceptions when it comes to outsourcing their IT needs.

Some of the top myths about outsourcing IT network management include:

Outsourcing is too expensive

While it is true that outsourcing can be expensive, the benefits have proven to consistently outweigh the cost. Outsourcing IT network management removes routine, repetitive tasks for your staff so your team can work on higher value projects, and distributes the work to ensure you maintain business continuity. Additionally, an outsourced provider typically has certified engineers who will monitor devices, maintain patch updates, and help you resolve complex issues, even when your employees are away from the office.

A local provider is better because they can come to our location to fix a problem

It is simply no longer necessary for IT partners to be onsite to manage a network. In fact, it may be difficult to find a local vendor with the banking technology and regulatory expertise required to meet examiner expectations.

An experienced outsourced IT services provider can help your institution recover quickly from unexpected business outages in your community. If a disaster does occur, local providers actually add a level of risk as they could also be out of service as well, increasing your recovery time and putting your organization at risk. The right IT partner understands the nuances of the financial services industry and can provide uninterrupted service, no matter the distance or circumstance.

Without a bad exam, everything must be okay

Regardless of location and size, small community banks and credit unions are under most of the same regulations as larger institutions, forcing a small IT staff to be well-versed in all regulatory guidance from cybersecurity to disaster recovery to meet examiner expectations. Auditors and examiners expect thorough documentation to prove that the institution’s daily practices match its defined policies and procedures. Financial institutions should not wait for a negative review finding to take a proactive approach to network management. Working with service providers that have dedicated staff and experts who understand the financial industry’s regulatory requirements and best practices ensures the required planning and reporting is completed in a timely manner.

Outsourcing replaces the institution’s IT personnel

There are hundreds of tasks that a small IT staff must complete on a regular basis to keep the bank’s operations running efficiently. Many community financial institutions have limited in-house resources dedicated to IT network functions. If a critical staff member goes on a vacation, is out sick, or leaves the bank, it can be difficult for the institution to manage the network effectively and maintain compliance.

Outsourcing helps to augment the bank’s current staff to act as an extension of the IT team. An IT partner can provide bank IT employees with more time to work on strategic projects, support front-line employees and focus on other revenue-generating activities. With an outsourced IT service provider, financial institutions gain an entire team of IT professionals equipped with advanced technology experience to support their IT needs. The staff is empowered, not replaced.

It’s better to do everything with the core provider

Without a doubt, the core banking platform is central to all financial institutions. However, you may be taking unnecessary risk by relying on them for all your needs. An IT services provider can help alleviate the stress by evaluating the infrastructure of the bank without bias, and eliminating the unnecessary hardware, processes and tasks, helping with overall management and ongoing cost. Whether it be network management, security, or compliance, it is unlikely your core will match the expertise a specialized partner can offer. Network management providers offer unbiased advice, while also diversifying your risk.

 
Many financial institutions struggle with choosing the right solutions partner. Smaller institutions in particular can benefit from outsourcing or partnering with a provider who offers network management solutions exclusively tailored for community banks and credit unions. Having a system in place that offers key features such as patch management, third party patching, antivirus, hardware and software inventory management, vulnerability remediation, and compliance-focused reporting to verify that your financial institution’s network is adhering to your policies and procedures is critical in today’s environment. 



Safe Systems’ NetComply® One IT Network Management service is designed to help ensure community financial institutions operate even more efficiently, securely and compliantly, while also decreasing costs, increasing performance, and improving an organization’s overall compliance posture. NetComply One streamlines your IT strategy and sets you up for success. Safe Systems’ IT network management solution was built using experience from managing IT networks for more than 300 financial institutions. Safe Systems’ combined years of banking knowledge and regulatory expertise allows us to truly understand banking IT operations, the unique platform configurations of financial institutions as well as the enhanced regulatory requirements. 



For more information, read our white paper, “Dispelling 5 IT Outsourcing Myths within Financial Institutions.”

Dispelling 5 IT Outsourcing Myths within Financial Institutions

Learn why five of the most commonly believed “facts” about IT outsourcing within community financial institutions are actually myths.

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

 Building Compliance into Your Financial Institution’s Processes

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.