If you’re in the financial services sector then obviously you’re reasonably good at measuring your ROI, risks, and making sure your customers can count on you when it comes to entrusting you with their most valuable assets and investments. As such, you know that investing is important. For reasons of savings, compliance, and security, managed identity governance is an investment you must make if you wish to succeed in the shifting marketplace of finance, and elevate your brand equity.
The ROIs of managed identity governance are proven and clear cut. IAM services provides savings on common pain points, including investing on a dedicated IAM team, licensing fees of identity tools, and productivity. IGA and PAM go a long way towards meeting compliance requirements. The tightened perimeter of IAM also prevents breaches, which can be catastrophic both to your finances and your customer trust.
Savings from Managed Identity Governance
Before getting into the major matters of compliance and security, consider the impact managed identity has on your daily operations. Whether you’re a credit card service, a bank, or an investment brokerage firm, your customer interactions depend on a strong identity apparatus. You act as steward of the wealth of another who trusts you to look after what is theirs. Without a solid foundation of governance, can you really be said to be worthy of that trust?
CIAM (Customer Identity and Access Management) should be at the top of your priorities for IAM investments. Investing on a robust CIAM elevates your business, especially when matched with managed identity governance. Banking institutions regularly breach millions. Wells Fargo boasts 68 MN active users. Ameris boasts over 300k customers and 66k businesses. Fidelity Investments claims over 80 MN active accounts. Discover lists over 57 MN cardholders in the US alone – so clearly when so many customers are at stake, investing proactively on identity governance only makes sense.
According to the Simeio’s Identity Saving’s Calculator, a bank serving a mere 20k customers across just 5 applications would save more than $2.4 MN a year. $520k would be saved in password rests alone. Implementing full blown IAM solutions can greatly improve your enterprise, but implementation can be complicated. Thus, financial institutions should strongly consider the merits of identity orchestration. Such a platform doesn’t just provide the centralized control needed for effective implementation of SSO, MFA, and secure self-service. It also provides critical monitoring, in real time no less, of information crucial to meeting compliance.
Meeting Compliance Needs through Governance
Finance sector regulations are strict and punitive. Anti-money laundering (AML) directive violations alone cost banking and brokerage firms more than $8 BN in 2022. GDPR infringements can cost either €20 million or 4% of annual worldwide turnover. PCI DSS violations can cost over $1 MN annually, yet according to the 2018 Verizon payment security report only 52.5% of all organizations are 100% PCI compliant. Gramm-Leach-Bliley Act (GLBA) violations can inflict losses of $100k per incident and up to 5 years of jail time. Failing to comply with SOX can result in the company being delisted from the public stock exchange.
As a financial institution, your biggest compliances are GDPR, PCI DSS, GLBA, SOX, and AML. Preparing for these requires several capabilities and ongoing practices. Are your identities able to be swiftly de-provisioned and their associated data scrubbed? Do you know if your third-party vendors are creating security risks? How much of your identity perimeter is unguarded and what are your remediation plans if a breach does occur? How often do you curate your identities for orphaned accounts and delete them before they become a vulnerability?
Managed identity governance can help you fulfill these needs and excel in other areas. Federated identity management can help ensure your security policies are automatically enforced. Managed identity governance helps counter identity sprawl, reining in extraneous accounts and reducing unnecessary attack surfaces. Privileged Access Management (PAM) grants real-time monitoring of sensitive accounts and automatically cuts off access the moment suspicious activity is detected.
Preventing Breaches through Managed Identity Governance
Having considered the tough but predictable burdens of compliance, now turn to the dark possibility of unforeseen catastrophe, and the rising costs of being breached. According to a report by Cybersecurity news, The average cost of a data breach in banking and finance increased from $5.72 million in 2021 to $5.97 million in 2022. There is also the matter of loss of customer trust, which can lead to a loss of customers, which leads to a loss in revenue. How much trust was lost by Flagstar when they suffered a massive data breach in June of 2022, leaking the social security numbers of nearly 1.5 MN customers?
You should also consider the uncomfortable need for a remediation strategy. Beyond being a requirement of compliance, the fact remains that bad actors and sneaky and smart. Unless every inch of your attack surface is locked up, you will have vulnerabilities. When hackers discover a weak point, they will attack and exploit it until they drill into where they shouldn’t be. Having a plan for when things catch on fire is not weakness or an admission of defeat. It is a sign of maturity.
Beyond the oppressive penalties levied against violators and the calumny of being hacked, failure to invest in the above systems leaves your systems under-equipped for the modern digital landscape. Each pain point is one more roadblock between a prospect and a customer. Every unoptimized system is another few thousand lost to inefficiency. Every sign of weakness in your cybersecurity strategy is a doubt sown in the minds of your customers. Only a unified solution, stretching across every identity under your responsibility, can safeguard against the disasters their absence invites.