Are you worried about the potential fines tied to FINRA non-compliance? What role can a managed service provider (MSP) play in easing your compliance burden?
That’s where Intelligent Technical Solutions (ITS) steps in. As an MSP specializing in cybersecurity and IT compliance, ITS offers tailored solutions to help businesses meet FINRA regulations efficiently and confidently
In this article, we’ll explore how MSPs like ITS help businesses stay FINRA-compliant while minimizing risks and saving time. We also invited Sean Harris, ITS’ Senior VP for Cybersecurity, to weigh in based on his experience.
By the end of this article, you’ll have the tools to evaluate if an MSP partnership is the right choice for you.
1. Comprehensive Risk Assessments
FINRA compliance starts with understanding your vulnerabilities. MSPs are uniquely equipped to help you with this – they're pros at identifying gaps in IT systems, policies, and equipment that could lead to non-compliance
Their expertise fulfills FINRA Rule 2090 (Know Your Customer), which says:
“Every member shall use reasonable diligence, in regard to the opening and maintenance of every account, to know (and retain) the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.”
MSP network assessments serve as the starting point for building strong KYC controls and help firms monitor and manage risks effectively. MSPs also provide detailed reports that make it easier to document compliance efforts and prepare for audits.
2. Secure Data Management
FINRA rules mandate strict data retention and protection policies, as laid out in Rule 4511 (Books & Records), requiring data records to be kept for at least six years. Rule 4370 (Business Continuity Plans and Emergency Contact Information) also builds on the need for proper data management as part of a thorough business continuity plan.
MSPs are well-versed in secure data management as they implement secure storage solutions, which keep client communications and sensitive data safely stored, encrypted, and easily retrievable for audits.
Additionally, MSPs’ expertise includes designing backup and disaster recovery plans tailored to financial businesses.
“Your internal IT department might do this once, while an MSP does it dozens and dozens of times,” Harris said. “Several years of experience as an MSP will rival a decade of experience at internal IT.”
RELATED: Disaster Recovery vs. Business Continuity vs. Incident Response Plans
3. Monitoring and Reporting
Continuous monitoring is another must for FINRA compliance – detailed in FINRA 3120 (Supervisory Control Systems) and FINRA Rule 3130 (Annual Certification of Compliance and Supervisory Processes). These rules require a combination of proactive IT, real-time monitoring, and fast incident response & reporting.
This is where MSPs shine; their entire business model revolves around proactive and real-time IT. Great IT providers with FINRA experience will also have reports that satisfy FINRA’s requirements, reducing the administrative burdens on your team.
4. Policy and Procedure Development
An MSP aligns your IT policies and procedures with FINRA’s guidelines, such as Rule 3110 (Supervision), Rule 3130 (Annual Certification of Compliance and Supervisory Processes), and Rule 4370 (Business Continuity Plans and Emergency Contact Information).
They do this by thoroughly reviewing your systems and processes. MSPs identify gaps in your IT infrastructure and create tailored policies that support effective supervision. They help you implement controls for data access, incident management, and regular monitoring to meet FINRA’s requirements.
MSPs also assist in documenting these procedures, making it easier for your business to demonstrate compliance during audits.
For Rules 3130 and 4370, MSPs develop IT plans to address these specific needs, such as backup and recovery processes to safeguard data and keep operations running during emergencies. Some MSPs even partner with cybersecurity training providers or provide training experts themselves.
5. Cybersecurity Expertise
FINRA strongly recommends businesses to have multi-layered cybersecurity. While they don’t have a specific rule detailing which cybersecurity framework financial institutions should follow, requiring business continuity plans and releasing multiple regulatory notices about data breaches and security recommendations make a strong case for following one.
Cybersecurity is, luckily, one of the most significant selling points of MSPs; they have trained security experts on staff, well-developed and tested tools, and keep up to date with current cyber threats and solutions.
RELATED: What Businesses Need to Know About Managed Cybersecurity Services
6. Training and Awareness
Lastly, FINRA regulations such as Rule 3110 (Supervision) require a large investment in employee training – both for keeping up with cybersecurity and maintaining your current system. There are even social media communication training rules!
MSPs offer training programs to educate your staff about FINRA regulations, cyber hygiene, and recognizing threats like phishing attacks. Empowered teams mean fewer compliance risks.
Ready to Partner with an MSP for Your FINRA Compliance?
Compliance shouldn’t hold your business back—it should propel it forward. With our tailored solutions, your business can confidently navigate the FINRA landscape, mitigate risks, and stay focused on serving clients.
Non-compliance is costly, stressful, and a constant threat to your business’s operations and reputation.
By partnering with ITS, you gain access to a team of IT and compliance experts dedicated to simplifying the path to FINRA compliance. Our solutions address your unique pain points, from complex regulatory requirements to managing daily IT operations.
Ready to simplify FINRA compliance? Contact ITS today for a consultation and discover how our services can help your business thrive while staying compliant.
If you want more information about managed IT and MSPs before scheduling a meeting, check out the following resources:
- How Much Does It Cost to Hire an MSP for Financial Institutions?
- Everything You Need to Know About Managed IT