An increasing volume of cyber risks is affecting the UK’s financial ecosystem, which severely affects financial institutions. As a regulatory body, the Financial Conduct Authority has set very stringent regulations with regard to Operational Resilience. In addition, FCA compliance will directly relate the Cybersecurity Maturity of all Firms to Regulatory Trust with FCA.
Pentesting will provide validation for real-life security effectiveness, as well as give firms the chance to find exploitable vulnerabilities before Attackers or Regulators do. Penetration Testing is also an essential part of developing effective FCA Compliance Strategies.
Understanding FCA Cybersecurity Requirements
The FCA requires businesses to act proactively in their approach to managing technology and cybersecurity risks. This activity supports the FCA’s expectations around regulatory compliance and operational resilience. Protection of customer data, systems, and financial stability is an obligation that all organisations have.
The level of cyber control a business should implement must be commensurate with its size and the level of risk associated with the technology. It is important that businesses test and evidence the effectiveness of their cyber controls, rather than just rely on the existence of policies. FCA regulatory compliance continues to focus on providing evidence of security and assurance as part of the regulatory compliance activity.
Why Penetration Testing Is Essential for FCA Compliance
Penetration testing allows companies to validate their security controls to ensure they work as intended. It provides the means to replicate an actual attacker’s actions across multiple platforms and applications. This allows firms to meet the FCA compliance expectations, which are aligned with an outcome-oriented approach.
Regulators are expecting companies to identify their vulnerabilities prior to a threat actor being able to use the vulnerability for personal gain. The results of penetration testing also allow firms to develop a greater awareness of risk and accountability at the board level. Therefore, many FCA compliance consulting companies advocate for conducting pentesting services as a key control component.