Having strong cybersecurity measures in place does not necessarily mean a business is ready for a regulatory audit.
A company may have patched devices, an active firewall, employee security training and a successful penetration test, yet still struggle when regulators ask for documented policies, testing records and a complete list of third-party suppliers with access to customer information.
This highlights an important distinction between cybersecurity and cyber compliance.
Cybersecurity focuses on protecting systems and preventing, detecting and responding to threats. Cyber compliance, meanwhile, requires businesses to prove that their security policies, procedures and controls are properly documented, reviewed and implemented.
The distinction is becoming increasingly important for financial services businesses facing greater regulatory scrutiny.
According to the DTCC’s Cyber Resiliency in the Financial Industry Survey, 49% of financial services organisations identify cloud and cybersecurity skills shortages as an internal challenge. A further 33% point to a lack of internal security signals, while 31% cite weaknesses in identity and access management.
When Evidence Becomes The Problem
One of the biggest challenges for businesses is that cybersecurity information is often spread across multiple systems and suppliers.
Endpoint protection may be managed by one provider, employee security training by another and penetration testing by a third. Vendor information may then sit separately in spreadsheets or internal documents.
While each individual control may be functioning, the business can struggle to produce one clear record showing how all of them fit together.
Third-party vendors can be particularly difficult to track. Businesses generally know which companies provide major services such as portfolio management or custody, but smaller technology providers can easily be overlooked.
Email platforms, customer relationship management systems, cloud storage and video conferencing services may all have access to sensitive information and therefore form part of an organisation’s wider cyber risk.
For smaller businesses, manually maintaining this information can become time-consuming and costly.
Regulators Want Proof
In the United States, financial regulators have increased their focus on cybersecurity governance and the protection of customer information.
The Securities and Exchange Commission’s cybersecurity requirements include areas such as incident response, access controls and oversight of service providers.
This means organisations must be able to demonstrate not only that their security measures exist, but also that they are documented, regularly reviewed and supported by evidence.
That evidence could include security policies, testing results, training records, vendor assessments and records showing when controls were last reviewed.
For businesses, the lesson is straightforward: having cybersecurity controls is only part of the job.
The other part is being able to prove that those controls are working and that the organisation understands who has access to its systems and data.
As cyber threats and regulatory expectations continue to evolve, businesses will increasingly need to treat compliance as a shared responsibility involving IT, legal, risk and compliance teams.
Cybersecurity protects the organisation. Cyber compliance provides the evidence that it is doing so responsibly.
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