By Guillermo Benites, VP of Financial Services at UDT 

Banks and credit unions face mounting cybersecurity threats and increasingly stringent regulatory requirements. Cybercriminals are growing more sophisticated, employing Artificial Intelligence (AI), especially Generative AI advancements, along with increasingly troublesome forms of malware. This is on top of ongoing industry challenges, such as keeping up with evolving compliance standards like PCI DSS and FFIEC. For financial institutions and FinTech companies, staying secure and compliant isn’t just a best practice—it’s a necessity for safeguarding sensitive company and customer data against cyber risks. 

Managed IT services have emerged as a critical solution in this high-stakes environment of online banking, where hundreds of millions of financial transactions are occurring each day. By leveraging modern IT strategies, tools, and partnerships, organizations in the banking industry can significantly improve their security posture, streamline compliance efforts, and enhance operational efficiency. 

The Rising Cybersecurity Threat Landscape in Banking 

The financial sector—from small community banks to large FinServ firms—remains a prime target for cybercriminals due to the sensitive data and monetary assets banking systems handle. According to the IBM Cost of a Data Breach Report 2023, the average cost of a data breach in the financial industry was $5.9 million, among the highest across industries. 

Common threats include: 

• Ransomware attacks that lock institutions out of their systems until a ransom is paid; 

• Phishing attacks or Social Engineering scams aimed at tricking employees into revealing login credentials; 

• Insider threats, either malicious or unintentional, that lead to data leaks or compliance failures; and 

• Distributed Denial of Service (DDoS) attacks that overwhelm systems with traffic, causing service disruptions and potential downtime. 

Legacy IT systems further compound these risks, making banks and financial systems more vulnerable to hacker exploits and operational inefficiencies. 

Compliance Pressures on Financial Institutions 

Banking is one of the most heavily regulated industries. Financial institutions must comply with a variety of standards, including: 

• Federal Financial Institutions Examination Council (FFIEC), 

• National Institute of Standards and Technology (NIST) Principles and Standards, 

• Payment Card Industry Data Security Standard (PCI DSS), and 

• Gramm-Leach-Bliley Act (GLBA). 

Failure to meet these standards can result in fines, reputational harm, and operational shutdowns. For example, the Office of the Comptroller of the Currency (OCC) has issued multi-million-dollar penalties for noncompliance with information security regulations. 

Moreover, maintaining compliance isn’t a one-time task. It requires continuous monitoring, periodic audits, and proactive threat management—an area where managed IT services excel. 

What Are Managed IT Services for Banks? 

Managed IT services refer to outsourcing IT responsibilities to a third-party vendor or service provider that specializes in maintaining and securing technology infrastructure. For banks and credit unions, this includes compliance and cybersecurity measures such as: 

• 24/7 system monitoring, 

• Data backup and disaster recovery, 

• Security patching and software updates, 

• Help desk support, and 

• Regulatory compliance reporting. 

These services are tailored to meet the unique requirements of the financial sector, ensuring both cybersecurity and regulatory alignment. 

Enhancing Data Protection with IT Services 

Managed service providers (MSPs) help financial institutions implement robust data protection strategies against cybercrime groups with features such as: 

• Encryption at rest and in transit to safeguard sensitive information; 

• Endpoint protection to secure devices used by employees; and 

• Identity and access management (IAM) (including requiring tools such as biometrics) to control who can access what. 

Additionally, MSPs deploy advanced threat detection systems that use AI and machine learning to identify potential intrusions before they become incidents. This proactive approach significantly reduces the risk of data breaches. 

Supporting PCI DSS & FFIEC Compliance 

Managed IT services are essential for maintaining compliance with financial regulations. They provide: 

• Real-time compliance monitoring tools, 

• Automated documentation for audit readiness, and 

• Security assessments to identify gaps and vulnerabilities. 

For example, PCI DSS requires secure network architecture and encryption protocols, which MSPs implement and monitor. Similarly, FFIEC guidelines stress the importance of third-party risk management and incident response planning—both are integral aspects of comprehensively managed IT services. 

Operational Efficiency Through IT Outsourcing 

Banks that outsource IT functions often see a significant reduction in downtime, faster issue resolution, and streamlined workflows. With 24/7 monitoring, MSPs can quickly identify and fix problems, allowing in-house teams to focus on strategic initiatives rather than firefighting. 

Additionally, outsourcing minimizes the need for extensive in-house IT teams, resulting in cost savings and scalability as the institution grows. 

Benefits of Cloud-Based Banking Solutions 

Cloud computing has revolutionized the financial industry by offering: 

• Scalability: Easily scale up or down based on demand, 

• Accessibility: Secure access from any location or device, and 

• Cost-efficiency: Pay-as-you-go pricing models. 

Platforms like Microsoft Azure and Amazon Web Services (AWS) provide secure, compliant environments tailored for financial institutions. These solutions support business continuity, backup, and disaster recovery strategies, ensuring minimal disruption during outages or attacks. 

Reducing Risk with Cloud Infrastructure 

Migrating core operations to the cloud reduces the reliance on vulnerable on-premises systems. Cloud infrastructure provides: 

• Built-in redundancy, 

• Automatic backups, and 

• Real-time updates and patch management. 

By enforcing multi-factor authentication (MFA) and role-based access controls, cloud solutions also improve access security while maintaining user productivity. 

Understanding the CSP (Cloud Solution Provider) Program 

The Microsoft Cloud Solution Provider (CSP) program allows banks to procure Microsoft services such as Microsoft 365 and Azure through a certified partner.