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Compliance & symbols over a financial & accounting themed background.

How Financial Firms Can Maintain Regulatory Compliance in 2022

Technology and data compliance go beyond not storing data publicly. It’s about maintaining a balance between the accumulation of data along with its proper documentation. Financial and wealth management firms in 2022 need to maintain a virtualized environment, encrypted data, and updated software on an ongoing basis. Keeping regulatory compliance with these practices will be essential to maintaining the firm’s reputation.

Many companies have managed to do so by relying on a third party or Managed IT Services Provider (MSP). While such an approach may be costly, in the long run it allows for a more flexible IT budget, all the while still allowing complete control over data and records. That’s what has led many firms to look for solutions that will enable them to properly keep track of their data and protect it from loss or theft.

The Pandemic and Proactive Compliance

With the rise of AI, many firms in the Financial services industry are looking forward to welcoming a more streamlined approach to compliance.

Further, targeted attacks have caused firms to be more aware of their security practices. As a result, some businesses would like to see an environment where they can use artificial intelligence to identify threats and recommend solutions without alerting the attackers.

Despite the rise of cybersecurity attacks during the pandemic, we’ve got a long way to go before financial & wealth management agencies can utilize AI in such regard. Instead, they cope by employing a proactive approach to compliance. As opposed to reactive compliance, opportunistic compliance can give firms more security than they would have otherwise.

How Firms Can Maintain Data Compliance

To begin with, financial firms need to be better at collaborating with data integrity providers.

To implement a proactive approach to compliance, wealth management firms have to partner with a trusted IT provider to develop systems in place that can offer them insights and data about the potential risk to their clients. The more details that are known about a client’s risk profile, the greater chance of knowing if additional regulations are needed.

Take GDPR compliance, for example, which is a regulation that firms need to be aware of. Firms that have been lax about their GDPR compliance may end up with a fine of millions in potential revenue.

Additionally, financial firms need to ensure their technology providers can deliver them the information they need to comply with regulations.

MSP’s should also be better at documenting their policies and processes. It makes it far easier to ensure that the firm is compliant in the present and compliant in the future. Although implementing a proactive approach to compliance can be costly, it yields better results in the long run than reactive approaches do.

Furthermore, it’s not just important that IT solution providers SAY what technology they have in place and what they do, but also have the proof of these processes in place. Distinguished MSP’s like Nerds Support are audited regularly to be considered certified under various regulatory compliance standards, such as SOC Types 1 & 2. Doing so not only builds trust between a financial firm and its MSP on a personal side, but ensures data peace of mind on the business side.

In 2022, regulators will look at financial firms and expect them to be ahead of the curve for data security and integrity. As a result, financial firms will have to rely on AI, partnering with an MSP, or other methods to maintain compliance. But many are still struggling with maintaining compliance without expensive technology.

Preventing Lost Data

Data loss can be a significant hindrance when it comes to building wealth. In some cases, data loss can result from a cyber-attack. In other cases, and more often than people think, it could also be caused by human error.

The leading cause of data loss is that firms lack the proper technology safeguards and training processes in place. So the first step in implementing such a process that will help prevent data loss is to upgrade any outdated systems, or partner with an MSP that can do it for you.

Cyber Liability Insurance

Cyber liability insurance has become an essential piece of the financial and wealth management industry’s ongoing security. Financial firms need to be aware that cyber liability insurance will provide them with peace of mind should a high-level disaster ever strike, like hurricane-caused outage or a successful social engineering scam.

However, the continued growth of the financial and wealth management industry makes it imperative for firms to stay informed about the ever-changing landscape of cyber liability insurance.

In addition, financial and wealth management firms need to know that cyber liability insurance is more than just a one-time payment. Though it may seem expensive, it will prove to be priceless when it comes to helping firms mitigate a cyber-attack or natural disaster.

Employees are part of these firms, and they have essential roles to play in their organizations. This means that they need to set up an environment to protect their sensitive data from cyberattacks while still allowing them the freedom to do their jobs, whether remotely or in the office.

The Key Takeaway

In 2022, financial and wealth management firms will need to be more proactive in taking care of their data. They need to take measures to prevent data loss, and they can do so by implementing AI technologies that can protect their firms.

Firms also need to understand that cyber liability insurance will help them with more than just funding their lawsuit; it will also help them maintain their credibility as a professional business organization.

If you found what we spoke about in this article as valuable, and are looking to advance your business’ technology strategy, or want to learn more about what our IT for Financial firms solution can do to help maintain data compliance, give Nerds Support a call or contact us for a Free Consultation!

Wealth Management business owner accesses his data securely on the cloud

3 Steps Your Wealth Management Firm Can Take to Protect its Data

Relocating to the Cloud offers remarkable perks for Financial and CPA firms that range coming from lesser IT costs, to real-time accessibility, to your customer tax information and even more dependability in regards to uptime. However, records in the Cloud are also susceptible to safety and security hazards similar to data stashed on physical servers. You’re going to need to take the proper procedures to ensure success with your data security.

Here are 3 things your wealth management firm can do to protect your sensitive data in the Cloud.

1 – Protected accessibility: The primary step will be to protect access to your data in the Cloud. How should you go about it? Secure your login credentials (your user ID’s as well as passwords) from spying eyes. Prepare solid password policies that are actually practiced across the board and also teach your employees concerning really good cybersecurity hygiene.
Do you have staff members using their own devices to access their work-related requests and files? Or possibly operating working remotely from a different location? If so, you additionally need to create strong BYOD (Bring-your-own-device) policies, so these tools do not fall into the hands of cybercriminals.

2 – Teach your employees: What is actually the very first thing that comes right into your head when someone discusses cybercrime? You most likely picture some strange person, a tech-whiz sitting in front of a personal computer in a dark area, making an effort to swipe your information. Unexpected as it may appear, the first as well as the biggest risk to your records and IT security comes from your staff members!

Destructive workers may do you harm purposefully by stealing or even damaging your records, however often, employees unknowingly come to be partners to cybercrime. For example, forwarding an email with an add-on which contains a virus, or clicking on a phishing web link unknowingly and entering delicate relevant information. They could even weaken surveillance when they discuss security passwords or even attach files using an unprotected Wi-Fi in social areas like the public locales or airport terminals with a view to “get things done “, and then without recognizing just how tragic the implications of such activities can be.

3 – Choosing the best Managed Provider (MSP): If you are actually putting your sensitive tax data in the Cloud, you need to have to see to it that it is in secure hands. Because of this, it is your managed service provider’s responsibility to guarantee your data is secure while easily and consistently accessible. Are they performing all that is actually needed to ensure this occurs? It is quite essential to choose a credible Cloud provider considering that you are essentially entrusting all your records to them. Therefore, in addition to strengthening your defenses, you should inspect exactly how well-prepared they are to actually avoid the dangers created by cybercriminals.

Comprehensive Cloud security is a mix of all these plus internal plans, greatest strategies, and rules related to IT security, as well as the MSP you pick to become your Cloud surveillance company contributes a vital part in all this.

Repairing Your IT Management

Small-to-medium-sized services (SMB’s) usually tend to have a more difficult experience managing IT than much larger organizations. Despite being as innovation dependent as bigger ventures, SMB’s such as accounting and financial firms possess tighter spending plans and less information to dedicate to IT control. This leads to a much more sensitive “break-fix” approach to their modern technology that never does any type of smaller sized business or association any type of good.

If the worry rests solely on your internal IT support, and they’re also cleaning up technology messes all the time, then their skills and talents are fundamentally lost.

If there is actually no in-house technician support, and other smaller companies or institutions don’t have even one on-site “IT man”, businesses are frequently taken for a ride by more underhanded IT advisors.

“If it isn’t damaged, don’t correct it” should never be applied to the control of business technology. The price of down time can easily obliterate any kind of scarcely surviving business. The mixed effect of lost income, dropped productivity, and reduced company credibility is actually a severe hit that many wealth management firms may not be constructed to hold up against.

It pays to become practical, certainly not reactionary when regarding innovation. This requires a social switch coming from how IT has often been dealt with previously. Forget about manual procedures and say hello to a better technique for companies to satisfy their technology needs – a smarter and also more inexpensive method.

How to Succeed with Company Innovation

Be Responsive – Most of the time, it is actually the things that may not be caught beforehand that develop into pricey company disruptions. For example, a lot of the hardware, programs, as well as software failures that lead to down time situations are actually preventable; they’re simply not noticed and addressed early enough.

Wealth management firms today benefit from utilizing a Remote Surveillance and Monitoring (RMM) tool to help their existing in-house IT staff get a grasp on their workload.

An RMM device, incorporated along with an outsourced 24/7 Network Operations Center (NOC), monitors your innovation all the time via one detailed user interface that is easily available using a mobile phone. This type of around-the-clock monitoring improves modern technology security. Issues could be cut short along with an alert and swift ticket settlement before they turn into major problems that interrupt day-to-day operations.

Automate/Schedule Tedious Tasks — Free the internal support personnel coming from everyday hands-on servicing and monitoring through automating a wide variety of IT security as well as surveillance duties.

Receive A Lot More From Your In-House IT — If you have any kind of in-house IT support, you have probably chose some incredibly skilled and also talented individuals that would be actually much more worthy contributors to your company if they weren’t so restricted constantly repairing issues and executing tedious tasks. Along With RMM and NOC options, financial and CPA firms can place these individuals to focus on ventures that actually matter. If you partner with a managed IT services provider, they can be freed-up to work on ideas, methods, as well as application growth that much better serve your customers, staff members, and suppliers, finally offering your organization a competitive advantage.

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Business man clicking a symbol of cloud computing

How Do You Make Regulatory Reporting Easier for Financial Institutions?

How Do You Make Regulatory Reporting Easier for Financial Institutions?

Financial institutions around the world are subjected to strict scrutiny to combat money laundering, tax evasion, fraud, terrorist financing, and other illegal activities. Complying with the standards set by regulatory bodies comes with its own costs, a burden that financial firms have to shoulder. It’s estimated that banks, insurance companies, brokerages, remittance firms, and other types of businesses that make up the financial sector spend more than USD 180 billion on compliance costs alone.

Despite this large spending, many establishments still fall short of meeting the guidelines set by regulatory bodies. This also comes with hefty fines. In just 10 years, financial institutions with local and international operations have accumulated a total of USD 36 billion in sanctions and fines due to non-compliance. In addition to this, brands also incur reputational damage due to getting involved in financial crimes and scandals.

This begs the question: what steps can your financial firm take to reduce the burden of regulatory reporting? At the same time, how can your company effectively protect itself from being used by criminals for illegal financial activities? Here are a few practical suggestions that can help your financial institution stay on top of the rules set by regulatory bodies:

Identify the Company’s Top Priorities for Regulatory Reporting

The first step in improving your company’s regulatory reporting process is to set goals and see how the current system you are using measures against these touchstones. Doing so will help you identify strengths and weaknesses in the process as well as choke points that should be resolved. If you’re planning on upgrading your regulatory reporting software or partnering with a managed IT services provider, this step can also help you create a detailed list of requirements that your new solution should be able to offer.

Examples of common improvements that can raise your establishment’s regulatory reporting capabilities include:

• a centralized data management system that can be readily accessed and used as a source for internal and external reporting;
• an automated end-to-end reporting system that takes care of everything from gathering data to submitting reports; and
• functionalities that allow easy visualization, prioritization, and organization of enterprise-level data, such as a depository for data quality rules.

Does your current regulatory reporting software have these tools and functions? If not, then it might be time to consider a more comprehensive and customizable solution, one that can effectively reduce the amount of work that your compliance team needs to shoulder.

Invest in Future-Proof Compliance Solutions

Financial crimes continue to evolve in an effort to foil the anti-crime measures implemented by law enforcement agencies, regulatory bodies, and financial establishments. To keep up with these changes and to remain effective in their mission, regulatory bodies are continually refining and updating the compliance rules that financial firms have to follow. This causes the cost of compliance to balloon year after year.

More than half of an average company’s compliance expenses goes to labor costs. This is because many firms find it necessary to hire specialized staff members or an IT consulting firm to ensure their company’s compliance every time regulatory bodies roll out new rules. The other half of the compliance budget is directed to technologies that can make the process more efficient.

However, many financial firms are reluctant to spend on new software for regulatory reporting, as this activity does not earn revenue for the company. At the same time, because compliance rules change every now and then, some companies are also not too keen on acquiring an expensive software that will go obsolete or need paid updates in the next few years or so.

What they may not know is that there are comprehensive reporting solutions out in the market today that automatically integrate the updated rules implemented by regulatory bodies. A solution like this can help ensure the integrity and timeliness of the reports generated by a financial establishment. It can also eliminate the need to hire specialized personnel every time regulatory bodies roll out new requirements. Moreover, because the new solution is updated automatically, companies can save on cybersecurity and what they would otherwise spend on new software or expensive updates.

In addition to savings, enterprise-wide regulatory reporting solutions offer a wide range of functionalities and customization options. This means that users can modify these solutions to suit the particular needs of their operation.

The Importance of Regulatory Reporting

Investing in regulatory reporting technologies has benefits that go beyond ensuring your company’s compliance. It’s also a solid step in protecting your company from the negative impacts of financial crime, like substantial fines and damages to one’s brand and integrity. In addition, providing your compliance team with the right tools and services will reduce the number of menial tasks that they need to accomplish. This, in turn, gives them more time and resources to ensure the quality of the reports that are submitted to regulatory bodies.

 

Financial advisor working remotely from home on his computer.

4 Things Financial Firms can do to Succeed Remotely

Financial firms are in the best position to succeed in a remote environment. Engaging with clients is easier than meeting in person and much of the work can be done regardless of location.

Americans are slowly adjusting to working from home. As states begin to ease the quarantine restrictions some companies are declaring permanent remote work environments. Companies like Facebook and Twitter are offering their employees the opportunity to work from home indefinitely.

Many firms have already moved to a fully remote operation and many more will do so in the future. However, moving to remote work can be difficult if handled incorrectly. Creating a successful remote operation is a new challenge CPA’s and financial firms will have to overcome.

When the lock-down started business owners looked to getting operations up as quickly as possible. Those who hadn’t migrated to a cloud based system did so. Others only migrated partly. While others still, struggled to adapt to a fully remote workplace. Video conferencing tools like Zoom and Microsoft teams grew in use and popularity.

Daily downloads of the videoconferencing app Zoom increased by 300 million participants since March. Businesses and employees spent time researching the different videoconferencing application and IT services companies that best fit their standards. But that’s only the beginning.

If you as a financial firm want to succeed in a remote environment you have to navigate cooperation, time management, data security and keeping your business functioning even while everyone may be so distant.

Here are a few ways to achieve success for your firm while working apart.

1) Take Advantage of Your Remote Environment

Maybe you’ve already noticed, but it’s difficult to distract each other with office gossip when there isn’t an office to gossip about. 85 percent of employees are either not engaged or disengaged at work. As a result, there is a 7 trillion dollar loss in productivity. Many offices have an open office layout which create a 32 percent drop in productivity.

However, this is harder to replicate when you’re forced to work remotely. Instead, the productive thing to do is to set virtual office hours or schedule meetings for a specific hour the day. Employees and staff can reserve a meeting however you choose. This might appear obvious to some but even in a remote environment it’s easy to get side tracked. You get one call from one colleague and then anther call 20 minutes later from an employee.  By the time you finish, you might not remember what you were doing in the first place.

Designate a period of time in your weekly and daily schedule for all meetings. The routine will also keep you focused and organized. Keeping a routine can lead to positive mental health. A routine can help manage stress levels and less overall anxiety, according to one study by Northwestern Medicine. College professors and councilors are very familiar with this system. It would be like having virtual office hours where team members can choose a slot and book a meeting.

2) Adapt to Technology

If you stop and think, if something like the Lockdown of 2020 had happened ten years earlier, remote work would not be possible. The emergence of cloud technology and communication apps like Microsoft Teams, Skype, Facetime, and Zoom together is what allows for a successful remote work environment.

Moving forward, many experts expect these changes to persist, bringing in a new era of remote activity. For financial firms, advising, asset valuation, and consulting will be done remotely. Firms should be looking to build on this change and integrate a remote reality to their existing operation.

What can your firm do to remain competitive, updated, and secure. Invest in a cloud service provider. IT services are going to be pivotal in the coming decades. Managed service providers will be in a position to make or break your firm. Look up the different cloud models and their features. Are they FINRA or SOX compliant? Where are their servers located? Are they stored somewhere outside the U.S.?

Nerds Support specializes in working with financial firms. However, there are many options available when hiring a managed IT service provider. Some are better than others, depending on the industry. You have to factor in security, location, knowledge of your industry, and even availability.

The Workplace platform provides a comprehensive solution that combines cyber security, compliance, & remote work needs.

The Workplace platform provides a comprehensive solution that combines cyber security, compliance, & remote work needs.

Is there someone you can talk to when something goes wrong? Do you have a point of contact? Sometimes a support team consists of strangers and other times it’s the CEO.

4) Build a Better Team Remotely

Human beings are social animals.  Although remote work is beneficial to productivity, it might be harmful to be socially isolated from your team. But there is a solution.

Team building is an important tool for social bonding and improving motivation. Setting aside an hour at the end of the week to celebrate that week’s accomplishments is a good example of team-building. There are a ton of other games and exercises you can try over video chat. Many have done virtual hangouts. Virtual happy hours are also popular. Even virtual competitions with certain free online games have brought offices together.   

5) Make Sure to Reconnect with Reality

The biggest issue in a remote work environment is that everything does seem to blend together. When you can’t distinguish your bedroom from your workplace it’s easy to get lost in a work-all-the-time mentality. Having an office has the psychological benefit of creating a barrier between your personal and work life.

A Stanford study showed that after 50 hours a week productivity sharply drops. Even worse, after 55 hours productivity gets so low that working becomes counterproductive.

I bring up the Stanford study because the comforts of working from home can often trick you into working more. Working an extra hour won’t kill you but the added stress of feeling like you’re at work at all hours is a serious problem. Establish clear boundaries for yourself and your team. When it’s time to log off, you log off. Communicate with your team your unavailability after a set time. Go for a walk, listen to music, but most importantly stay away from your computer.

 

Financial cloud Industry Digitizing with the Cloud

Financial Cloud for The Financial Services Industry

Cloud for Financial Services Industry

Financial cloud services is an evermore popular topic these days, especially with the rising necessity of remote work options. Financial services organizations are moving to the cloud for a competitive advantage, advanced security and the potential for innovation. The global finance cloud market was valued at more than $15 billion in 2018 and is expected to reach about $55 billion by 2024, according to report by Mordor Intelligence.

One of the driving factors in cloud finance is operational efficiency. Moreover, by using the cloud, companies are able to offer end-to-end loan processing in record time, surpassing finance industry benchmarks.

Finance and asset management is undergoing a radical transformation. Four out of five organizations that participated in a Bizagi report say that providing a better customer experience that can respond to customer needs enables competitive advantage.

Digital Transformation

Companies continue to explore the cloud for financial services and its benefits. Additionally, cloud software provides companies the ability to focus on revenue and wealth management, while maintaining customer relations.

CSPs arose as a leaders in the digital transformation of various industries. These industries like retail and distribution represent sectors with medium to low regulatory oversight. This reduces some of the complexities associated with implementation.

However, adopting the cloud for highly regulated industries like banks, insurance and healthcare companies did not follow this trend. CSPs lacked the maturity to meet financial organizations’ regulatory and compliance requirements. But this has changed in recent years, with cloud adoption increasing within the industry according to a Gartner study.

Both the banking and insurance industries are adopting cloud services. The study also states that by 2020, 36 percent of institutions will use the cloud to support more than half of their transactional systems of record.

Regulations and Standards

The entry way to the cloud does have its challenges and it’s important to understand the full picture. Those who work in an industry as heavily regulated as that of financial services don’t need  reminders of their importance. There’s an expectation that Financial services organizations protect sensitive data and are subject to strict data security requirements. Data protection, business continuity, data privacy are considered when outsourcing their infrastructure over to a cloud service provider.

Financial services are among the most regulated industries with regards to data privacy and security. There’s a long list of regulations that include: PCI, DSS, GLBA, GDPR, Dodd-Frank, FFIEC, SOX and the USA Patriot Act.

Reluctance to Adopt the Cloud

With 71 percent of financial service businesses agreeing that digital transformation needs to happen fast in order to prevent commercial failure, what problems stop these companies from committing to the cloud?

In a survey released in March 2015, the majority of participants cited data security as their primary concern, with application development and testing being their primary desire of utilizing the cloud.Financial Industry Respondents Statistics on Digitizing with the Cloud

Reasons to Adopt the Financial Cloud

Despite those concerns, the reality is financial cloud security is actually an upgrade, and actually deter or remove any potential risks to data. A cloud provider uses top grade security features and a team of highly skilled systems engineers that monitor suspicious activity around-the-clock. Cloud service providers (CSP), like our IT Support for Financial firms also implement automated backups every day to reduce risk of data loss in case of a breach. The cloud is better than traditional systems with security. Using pattern matching technology to recognize anomalies when they appear, cloud providers prevent risks rather than create it.

CSPs are extremely secure and have redundancies in place. Regardless, it’s up to each financial institution to understand what they are buying from a CSP, the type of risks associated with the service provided, and the regulatory requirements. For example, depending on the importance of a FI’s service and the sensitivity of their data, the FI can choose the level of encryption. Passwords and encryption keys can be managed in various ways; some CSPs, like Nerds Support, offer additional services like “security as a service.”

Some CSP’s, like Nerds Support, take the added step of achieving compliance with HIPAA and PCI DSS regulations. In doing so they show the capacity to meet stringent security requirements, enabling customers to leverage security capabilities to meet these compliance requirements.

A Customized Cloud

Financial institution need to assess all the risks involved in their processes. Some of those tasks cannot be outsourced. That’s why the financial organization goes through a strict evaluation and assessment of the provider to ensure the quality of service is guaranteed as promised when choosing a provider.

The greatest risk for any organization, however, is not being ready to implement a digital transformation. Larger organizations face internal resistance. There is a resistance to change that plagues both large and small companies.

As more and more companies adopt cloud solutions, however, those in the financial services industry are looking to implement the cloud themselves to keep up. The need to incorporate on demand, easy-to-use services to meet ever changing customer expectation.

The skepticism by financial institutions is understandable. However, they were using Amazon Web Services which is a public cloud provider. There are CSP’s that cater to mid-market businesses and offer personalized services to their partners in the financial services industry. These types of services are more characteristic of private or hybrid clouds.

For example, CSP systems engineers at Nerds Support take the time to evaluate their partners’ current IT infrastructure through an extensive consultation process, rather than pushing a one-size-fits-all cloud service.

Things to Consider

The point here is that CSP’s are not all the same. They vary in the services they provide and how the go about implementing the cloud itself.
When adopting a cloud strategy, financial services decision makers should watch out for:

• Cloud providers that are unwilling to use compliance and up-to-date security to improve and personalize their service.
• Cloud providers that lack the financial services expertise necessary to maintain compliance and regulation standards.
• Make sure that your cloud contract states you keep ownership over all your data.

Customer Support is Important

In the early years of cloud computing, customer support was a huge issue for users. Users plagued by poor response times, inexperienced technicians and overall poor customer experience. Since then, CSP’s have taken great strides in improving support. Cloud technology has been around long enough to better implement through industries that benefit.

If you need a rapid response to client issues, make sure that your cloud services provider has options available for technical support. These options should include phone consultations, email and user training.

The reason to emphasize this point is because a CSP partnership is one that works best when it’s long term. Choosing a cloud provider that dissatisfies means going through the grueling process of migrating from one account partner to another. The problem is, many of these applications don’t easily transfer to other systems.

What are you waiting for?

It’s time for the financial services industry to leverage financial cloud to improve productivity, security and service. The opportunities and capabilities are there. For more information on  financial cloud services, call us at (305) 551-2009 or contact us with the button below.

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