Business goals

IT Governance: Aligning Technology with Business Goals

Many institutions have increased their technology spending to strengthen their defenses against cyber threats and comply with changing regulations. But the return on these expenses is not always clear if the strategies and objectives are poorly defined. Adopting IT governance enables your institution to ensure that IT, compliance, and cybersecurity strategies, and associated technology, are aligned with your goals for optimal effectiveness.

This blog answers common questions about the benefits of a risk-based approach to IT governance for financial institutions, including the distinct benefits of an IT governance advisory services model.

What is IT Governance?

Gartner defines IT governance as “processes that ensure the effective and efficient use of IT to enable an organization to achieve its objectives”. IT governance serves as the foundation on which IT systems must operate and understands the risk management surrounding these systems from a regulatory and business perspective. In short, key outcomes of adopting IT governance include mitigating IT and cybersecurity risks and ensuring that technology investments support an organization’s goals.

Why does an organization need IT governance?

Many banks and credit unions approach IT and cybersecurity issues strictly as technical issues, increasing their spending on security programs and technology year after year. For financial institutions that view these issues from a technical perspective, the solution is often to buy more technology.

According celent research, institutional spending is increasing globally, with banks allocating large sums to meet compliance requirements, strengthen IT security and invest in new technologies. The expected results of this spending include increased security, compliance, and growth. But budgetary investments alone do not always generate these results.

IT and cybersecurity are business issues – not just technical issues – and must align with an institution’s goals in order to achieve greater efficiency. As part of a holistic approach to IT, security, and compliance, IT governance ensures that an institution’s technology and business goals support its broader strategies.

Why Adopt a Risk-Based Approach to IT Governance?

As institutions struggle to determine how much to invest in cybersecurity protection, shifting to a more finance- and business-focused approach becomes essential to better manage risk and resources.

An institution’s investment in cybersecurity should depend on its individual goals, risk assessment and risk appetite, or a representation of the level of risk an institution is willing to accept. For this approach to be meaningful, it must include a measurable scale of risk and an underlying governance process that enables decision-making around risk. As indicated in the AIO Booklet IT governance is critical to an institution’s success, and a lack of governance negatively affects cybersecurity readiness and contributes to inefficient use of resources.

To create a business context around IT and cybersecurity, an institution must first understand how cybersecurity risk relates to its business model. Every institution has a risk appetite and risk tolerance, which strongly affects the institution’s budget and desired business goals.

Each domain has specific risk factors and underlying supporting technologies with associated risks. Failure to consider cybersecurity in the broader context of business impact creates a disconnect in risk assessment and the ability to determine how possible threats play into overall strategy and risk appetite of the institution.

How does IT governance strengthen an institution’s cybersecurity posture?

Leveraging IT governance minimizes the risk of complex and heavy layers of security. While institutions should implement layers of securitytaking a holistic view and examining an institution’s security posture through the lens of IT governance ensures that security layers are well-designed and do not create friction in business processes.

A risk-based approach to IT governance also mitigates the risk of an institution falling into a false sense of security. Some institutions implement security checks or perform a risk assessment and feel they have done enough to stay secure. But in today’s ever-changing threat landscape, a risk-based approach to cybersecurity is essential because it establishes a continuous process with minimal wiggle room.

How does IT governance help institutions navigate the regulatory landscape?

Since compliance is generally considered a checklist item, some institutions implement security checks just to tick each box. It is important to remember that compliance is not necessarily synonymous with safety or the promotion of commercial objectives. A strategic risk-based approach to compliance is essential to ensure an institution is set up for success.

And while compliance is essential for every institution, the specific tactics for achieving compliance will differ based on institutional factors, such as budget and risk appetite. Institutions have varying budgets and capital, which can dictate compliance initiatives. Most regulations can be addressed using more than one methodology or control, prompting regulators to move from a checklist approach to a true risk management approach.

While regulatory compliance guidelines provide a governance framework and model, allowing these guidelines to guide cybersecurity decisions will typically lead to gaps in coverage and misallocation of resources. To develop an effective compliance program, keep in mind available resources, risk appetite, and your institution’s strategic goals.

What are the benefits of a consulting services model for IT governance?

Advisory Services are used in various industries and involve an industry expert working with an organization to provide recommendations regarding IT governance. Working with a seasoned vendor gives an institution access to a team of professionals with diverse backgrounds and perspectives, without committing internal resources such as the time and effort to recruit and retain technical staff or salary and benefits. of a CISO or internal DSI.

An advisory services partner regularly works with institutions of all sizes and in different markets, keeping them up to date with industry trends and increasing their knowledge of regulators’ expectations. Through consulting services, institutions have access to experienced individuals who will conduct board training sessions and educate senior leaders on information technology and cybersecurity.

In addition, IT governance consultants in the financial services industry regularly read and analyze FFIEC guidance and review guidance libraries and other policy templates to help institutions meet regulatory and business needs. The right IT governance consulting partner will understand how technology, cybersecurity, and financial services intersect, guiding an institution to achieve its specific business goals.

Want to know more about IT governance?

Since financial services operate on the rails of IT, institutions need to consider technology in their planning. By adopting IT governance, an institution will ensure that its IT, cybersecurity, and compliance strategies align with current technology and business objectives. Visit our website to learn more about optimize your IT and security strategies and planning for future needs.

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Steven Ward leads the strategic business advisory team for CSI Advisory Services. In his role, he sees and analyzes the alignment of IT with the business strategy and security needs of financial institutions across the country. An experienced financial services executive, Steven brings his expertise to CSI clients and regularly speaks on information security, cybersecurity, IT and IT audit and business and IT strategy topics.