Cybersecurity Compliance Requirements for Financial Services: A Simplified Checklist

If you're reading this, you're probably already drowning in compliance requirements. Maybe you're trying to figure out which regulations actually apply to your organization. Or you're preparing for an audit and need to make sure you haven't missed anything. Or perhaps you're just trying to get your arms around the whole mess so you can explain it to your board.

I've been in your shoes. And, unfortunately, financial services compliance is a moving target. So instead of another high-level overview that doesn't help much, I've put together a practical, actionable checklist based on what I've learned helping financial institutions navigate this landscape. Let's dive in!

Which Cybersecurity Regulations Apply to Financial Services?

Financial institutions must comply with multiple federal, state, and industry-specific regulations depending on their business model and customer base. The most common requirements include:

• Federal regulations: SOX, GLBA, and BSA
• Industry standards: PCI DSS for payment processing
• State laws: New York's 23 NYCRR 500, California's CCPA
• International rules: GDPR and UK-GDPR for European customers

Your specific compliance obligations depend on whether you're publicly traded, which states you operate in, and what types of customer data you handle.

Why Do Financial Institutions Face Stricter Compliance Standards?

Financial organizations hold highly sensitive data. This obviously makes them prime targets for cybercriminals seeking to profit from stolen data or disrupt financial systems. But financial organizations aren’t the only ones to have this problem.

The bigger issue, though, isn’t the risk to the financial institution itself. Individual customers can face identity theft and financial losses, while systemic breaches can destabilize markets and erode public trust in the financial system. That’s why regulators have felt the need to impose strict compliance standards to ensure financial institutions implement strong security measures proactively, rather than responding only after a breach occurs.

What “Counts” as a Financial Services Organization? 

"Financial services" extend far beyond banks and investment firms. If your organization handles customer financial information, offers financing, or processes financial transactions, you likely fall under financial services compliance requirements.

Apart from more obvious examples of financial services, like banks and investment firms, here are a few examples that might surprise you:

• Universities
• Auto dealerships
• Real estate firms
• Accounting firms
• Any other organization that collects, stores, or processes customer financial data

A more comprehensive breakdown can be found here.

Complying With Financial Services Cybersecurity Regulations

In my experience, most financial services organizations want to comply with regulations. The frustration comes from regulations that are written to accommodate everything from small credit unions to global banks. That kind of flexibility is necessary, but it also means you're often left figuring out what “reasonable” security measures look like for your specific organization. And what’s considered reasonable also can change from year to year, if not month to month.

I’ll provide a simplified list further down of cybersecurity controls that most financial services organizations need to have in place. However, here’s the bigger picture of how you need to think through compliance:

1. Identify Which Regulations Apply to Your Type of Organization

Not every financial institution faces identical requirements. Your obligations will vary based on:

• Organization size and revenue
• Public vs. private company status
• Geographic locations where you operate
• Customer data types you collect and store
• Payment processing activities
• Third-party service relationships

How to get started: Conduct a comprehensive compliance audit with legal and cybersecurity experts to map every regulation applicable to your specific situation. If you don’t have a chief information security officer (CISO) in-house, taking advantage of IT consulting services can be helpful.

2. Implement SOX Requirements (If Publicly Traded)

The Sarbanes-Oxley Act applies to all publicly traded companies and their accounting firms. If your organization falls into that category, SOX requires that you:

• Secure storage and management of financial records
• Maintain robust access controls with monitoring and logging
• Conduct regular data backups
• Maintain audit trails for all system activities
• Hold annual internal and external audits

How to get started: Assign a SOX compliance officer who maintains current knowledge of requirements and coordinates audit preparation.

3. Meet GLBA and Safeguards Rule Standards

The Gramm-Leach-Bliley Act mandates protection of customer financial information and transparency about data-sharing practices. More specifically, you’re required to:

• Develop a comprehensive information security program
• Conduct risk assessments
• Implement safeguards for customer data
• Disclose information-sharing practices
• Allow customers to opt out of data sharing with third parties
• Provide annual security awareness training

How to get started: Document your information security program and update your privacy notices to comply with GLBA disclosure requirements.

4. Achieve PCI DSS Compliance

If you process, store, or transmit credit or debit card information, PCI DSS compliance is mandatory. The standard requires that you:

• Build and maintain secure networks
• Protect cardholder data through encryption
• Manage vulnerabilities with regular updates
• Implement strong access controls
• Monitor and test networks continuously
• Maintain formal security policies

How to get started: Determine your merchant level based on annual transaction volume. Then complete the appropriate Self-Assessment Questionnaire and remediate any gaps.

5. Comply With BSA Anti-Money Laundering Requirements

The Bank Secrecy Act requires financial institutions to help prevent money laundering and terrorist financing. What that means in practice is that you:

• Use transaction monitoring systems
• Quickly identify and report suspicious activity reporting
• Issue currency transaction reports for amounts exceeding $10,000
• Maintain customer identification programs
• Follow strict record-keeping procedures
• Use internal controls as well as independent testing

How to get started: Implement automated transaction monitoring tools and establish clear reporting procedures for suspicious activities.

6. Address State-Specific Cybersecurity Regulations

Several states have enacted additional cybersecurity requirements.

If you’re supervised by the New York Department of Financial Services, your organization must:

• Assess your specific risk profiles
• Design programs that address those risks
• File annual compliance certifications signed by senior management

If you operate in California, the California CCPA grants consumers the right to:

• Know what personal information is collected
• Request deletion of their data
• Opt out of data sales
• Receive equal service

How to get started: Identify which state regulations apply based on your operational footprint and customer locations.

7. Understand International Data Protection Requirements

If you serve any customers in the European Union or the United Kingdom, you must comply with their data protection regulations regardless of where your organization is headquartered.

GDPR and UK-GDPR require that you:

• Process personal data lawfully
• Maintain transparent data practices
• Abide by data minimization principles
• Maintain accurate record-keeping
• Use limited data retention periods
• Have strong security measures
• Maintain evidence of compliance

Action item: If you have an international customer base, conduct a data protection impact assessment and implement required controls.

What Security Controls Do Most Financial Compliance Regulations Require?

This list isn’t a one-size-fits-all solution. But most financial services regulations mandate similar foundational security measures. If you’re looking to get a gut check on whether you’re following best practices, this list is a good starting point:

End-to-end encryption:

• Encryption of sensitive data in transit and at rest, including customer information, payment card data, and internal communications

Access controls, including:

• Multifactor authentication
• Role-based access controls
• Regular access reviews
• Immediate access revocation upon employee termination
• Privileged access management

Network security, including:

• Firewalls with custom configurations (not default settings)
• Intrusion detection and prevention systems
• Secure web gateways
• Network segmentation
• Continuous traffic monitoring

Logging and monitoring protocols to identify:

• User access attempts and activities
• System changes and configurations
• Network traffic patterns
• Security events and incidents

Incident response planning for:

• Detecting security incidents
• Containing and eradicating threats
• Recovering affected systems
• Notifying customers and regulators within required timeframes
• Conducting post-incident analysis

Managing third-party vendor compliance risks with:

• Security assessments before vendor onboarding
• Contractual security requirements
• Ongoing vendor performance monitoring
• Regular security reviews
• Incident notification requirements
• Right-to-audit clauses

Simplifying Cybersecurity Requirements for Financial Services Companies

Rather than treating each regulation separately, I find that it’s helpful to understand that most regulations require similar foundational security controls. Strong access management, encryption, monitoring, and incident response planning will satisfy requirements across multiple regulations simultaneously.

If you know you need to make a few improvements, but aren’t sure where to focus your efforts, here’s where you could make life easier for yourself moving forward:

1. Start With a Comprehensive Assessment

Before you can streamline compliance, you need to know where you stand. A thorough cybersecurity assessment evaluates your current security posture against regulatory requirements and identifies gaps prioritized by risk and compliance urgency. This baseline can then become your roadmap.

2. Implement Integrated GRC Platforms

Use governance, risk, and compliance software to centralize compliance tracking across all applicable regulations. This gives you a single source of truth instead of scattered spreadsheets.

3. Automate Where Possible

Deploy tools for continuous monitoring, log analysis, and compliance reporting. Automation reduces manual effort and provides real-time visibility into your compliance status.

4. Leverage Fractional Expertise

Some financial institutions may not need a full-time CISO, but they might benefit a great deal from strategic security leadership. Virtual CISO services provide access to experienced security executives who can develop your compliance strategy, guide implementation, and communicate effectively with your board — without the overhead of a full-time hire.

5. Build a Continuous Improvement Cycle

Compliance isn't a one-and-done project. Establish processes for ongoing monitoring, regular assessments, and systematic improvements. This "always-ready" approach makes audits far less stressful.

Frequently Asked Questions About Financial Services Compliance

Q: How do I prioritize when I can't address all compliance gaps at once?

A: Start with violations that carry the highest penalties or pose the greatest risk to customer data. Focus on controls that satisfy multiple regulations simultaneously. Document your remediation plan with timelines — regulators often give credit for good-faith efforts and clear roadmaps.

Q: What are the most common compliance mistakes financial institutions make?

A: Treating compliance as a documentation exercise rather than actually implementing controls. Other common ones include inadequate vendor management, failing to update policies when regulations change, not testing incident response plans, and poor evidence collection for audits.

Q: What triggers a compliance audit, and how much notice will I get?

A: Some audits are scheduled (annual SOX audits, PCI DSS assessments), while others can be triggered by customer complaints, data breaches, or regulatory concerns. Notice periods vary. You might get months for scheduled audits or days for incident-driven examinations. This is why maintaining "audit-ready" documentation is critical.

Q: How do I justify compliance spending to leadership when budgets are tight?

A: Frame it in terms of risk and business impact. Calculate potential fines, breach costs, and reputational damage from non-compliance. Show how compliance investments reduce insurance premiums, enable new business opportunities, and build customer trust.

The Final Word on Financial Services Compliance

Compliance is complex, and the stakes are high. But viewing it as merely a regulatory burden misses the point. These requirements exist to protect your customers, your organization, and the broader financial system.

Most of the organizations I talk to have most of the basics in place. What would help them most is ongoing cybersecurity mentorship from a vCISO or better breach readiness capabilities. At Marco, we can help with both. Our IT consulting services make it easier to keep up with evolving risks and regulations, and our ACE cybersecurity breach readiness services are designed to fill a more specific gap.

Click the link below to learn more!