Security risks are on the rise for financial institutions. A recent Trend Micro survey found that banks experienced a 1,318 percent rise in ransomware attacks year over year in the first half of 2021, even as financial firms overtook retail businesses as the third most popular target for phishing attacks.
According to research firm Deloitte, this evolving security landscape speaks to the need for financial firms to design a “modern toolbox for risk and compliance.” In practice, however, this isn’t always a straightforward task: Banks must pinpoint potential vulnerabilities, assess their impact and develop remediation strategies across ever-growing networks.
To help streamline this process, many enterprises have turned to CISOs — highly trained and experienced IT security professionals capable of helping banks make the most of current security solutions and finding new ways to improve overall protection.
But what about smaller firms or fintechs just breaking into the market? What about community banks and credit unions whose budgets don’t support hiring a full-time CISO? For those, a virtual CISO can help bridge the gap, without breaking the bank.
READ MORE: Find out how AI can help financial institutions with risk mitigation.
What Is a vCISO?
A virtual CISO is effectively a “CISO on demand.” Instead of spending time searching for the right candidate, conducting interviews, shortlisting applicants and defining the scope of full-time responsibilities, financial firms can turn to virtual CISO services to quickly integrate top-tier security professionals into current operations.
Virtual CISOs are typically offered through providers that have created and curated a cadre of experienced staff capable of seamlessly transitioning into an institution’s operations. Before signing a vCISO to a term-based contract, the financial firm’s internal staff typically has a chance to connect with the vCISO and ensure he or she is the right fit for the organization.
It’s also worth noting that the “virtual” in vCISO doesn’t specifically speak to remote work. While hybrid frameworks are becoming more common among financial firms, and many security tasks can be handled virtually — especially if they involve cloud or mobile services — the term “virtual” simply refers to the fact that vCISOs are not regular employees of the company — instead, they’re contractors hired for a fixed term, or professionals working on retainer to help organizations achieve specific goals.
When Does Hiring a vCISO Make Sense?
There are several situations where bringing on a vCISO may be more effective than hiring full-time staff. The first involves budget: CISOs are experienced security professionals who command significant salaries and benefits given their role and responsibilities. Financial firms may also have specific security tasks they’re looking to complete — such as creating defensible hybrid work solutions — that are best addressed on a project-by-project basis.
It’s also worth considering the benefits of connecting with a vCISO to sidestep the challenges that come with a marketwide skills gap in cybersecurity professionals, paired with the ongoing impact of the Great Resignation on financial firms of all sizes.
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How Can Virtual CISOs Benefit Financial Institutions?
There are three broad areas where banks and credit unions may benefit from the services of a vCISO:
- Cost: According to research firm Gartner, total cash compensation for a full-time CISO now ranges from $208,000 to $337,000 per year. And while experienced CISOs are well worth the cost, many banks simply don’t have this kind of money in their staffing budget, especially as they look to navigate the new landscape of mobile-driven, post-pandemic finance.
Virtual CISOs can help financial institutions save money without sacrificing security. Instead of paying for a full-time, salaried employee, organizations can hire a vCISO on a contractual basis. Need help for three months? Six? No problem. Companies can find a best-fit vCISO who understands the industry, then leverage his or her talents for a specified period to accomplish a specific task or complete top-priority projects. Once the contract is complete, no obligations exist on either side.
- Compliance: CISOs can also help banks meet regulatory compliance. This is critical as compliance expectations continue to evolve: As of April 1, 2022, banking organizations are required to report any “significant” cybersecurity incident within 36 hours of discovery. In practice, “significant” means an incident that materially affects the ability of a bank to deliver its products or services or that negatively impacts the viability of its operations. Virtual CISOs can pinpoint potential vulnerabilities to reduce the risk of compromise and assess the damage done by cybersecurity attacks to determine if incidents must be reported.
- Confidence: The expanding use of cloud and mobile technologies in banking coupled with the rapidly changing nature of security threats often leaves staff and leaders uneasy, unsure of when, where or how new attacks will happen. By engaging vCISOs, however, financial firms gain the peace of mind that comes with in-depth knowledge and expertise. While it’s possible for banks to follow do-it-yourself security frameworks using available solutions and staff, vCISOs are experienced security contractors who have identified, addressed and remediated problems across a host of network configurations and infrastructure models.
While hiring a permanent CISO may not be in the cards for an institution, a vCISO can offer the best of both worlds: real value without the cost and complexity that comes with hiring full-time staff.
This article is part of BizTech's EquITy blog series. Please join the discussion on Twitter by using the #FinanceTech hashtag.