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IT Governance and ITIL Framework for Investment Banks and Brokerage Firms

IT Governance and ITIL Framework for Investment Banks and Brokerage Firms

Investment banks and brokerage firms are subject to strict legal and regulatory oversight, which means these companies must implement measures to ensure that their technology meets all of the established guidelines.

Enter IT governance and ITIL frameworks for investment banks and brokerage firms. But when it comes to ITIL frameworks and IT governance software solutions, the options are many and varied, leaving business leaders wondering about the role of each technology and which option is best for their company’s needs. 

What is an ITIL Framework? And How is it Used by a Brokerage Firm or Investment Bank? 

The ITIL — which stands for information technology infrastructure library — framework was first developed in the 1980s. The UK’s Central Computer and Telecommunications Agency (CCTA) established the framework as part of their IT service management best practice recommendations.

These ITIL governance frameworks examine a company’s technology as it relates to: 

  • Organizational processes;
  • Business / operational processes; and 
  • Leadership processes. 

An IT task force must examine each of these processes to evaluate their overall efficacy, offering recommendations for improvements on an as-needed basis. The processes in these three areas — organizational, business / operational, and leadership — must reflect the company’s operational goals, business goals, and strategic objectives — all while simultaneously aligning with best practices in terms of cybersecurity and data governance.

It’s also important to understand how governance relates to ITIL. In the context of an ITIL framework, governance refers to the protocols and policies that an organization establishes for the development, implementation, deployment, monitoring, and oversight of its IT systems. This includes the company’s hardware, software, networks, and data storage platforms, among others. 

ITIL Framework vs COBIT Frameworks: A Comparison

Often, an investment bank, brokerage firm, or other financial institution may find itself debating between the merits of an ITIL framework versus a COBIT framework. Both have their own unique benefits and some organizations can implement both frameworks to gain a strategic and operational advantage. 

ITIL frameworks are focused on operational aspects, with an emphasis on technology that relates to operations such as service delivery and operational management. For ITIL frameworks, the ultimate goal surrounds optimizing operational efficiency with the ideal technology. and IT solutions. 

On the other hand, COBIT frameworks focus on strategic elements, such as government policies and procedures. The ultimate goal for a COBIT framework is to optimize the company’s IT strategy so it supports the company’s broader business goals and objectives.

Both COBIT and ITIL frameworks offer distinct benefits to an organization, including financial institutions such as brokerage firms or investment banks. Therefore, you may find it beneficial to leverage both types of frameworks in your IT systems. The solution may come in the form of a custom enterprise framework platform, which can be developed to suit your organization’s exact needs. 

Implementing and Deploying IT Governance and ITIL Frameworks for Brokerage Firms and Investment Banks

Brokerage firms and investment banks deal in large volumes of sensitive information, with lots of customer data and financial data being collected, transmitted, accessed, and stored. Your company’s data governance and data management systems must meet all minimum requirements in terms of security, including encryption and firewalls, along with protection from cybercriminals, data theft, malware, ransomware, and viruses. 

Lots of these security measures are actually mandatory now because regulatory bodies require financial institutions to maintain a certain level of security as an absolute minimum (with greater, more significant security levels obviously being the ideal.

What is IT Governance? 

IT governance is essential for success in today’s highly-competitive and highly-targeted financial sector. Banks, credit unions, investment banks, brokerage firms, and other financial institutions are faced with lots of cybersecurity threats and there are countless other vulnerabilities and risk factors that must be considered. Add in the operational demands and you have an IT infra very complex dynamic for your IT infrastructure. 

A refined, well-thought-out IT governance strategy is the solution. For a financial institution, IT governance plays several key functions: 

  • Improves IT functionality in a way that supports the company’s operations in a governance-friendly manner. 
  • Ensures alignment between the company’s technology and its business strategies — all while maintaining regulatory compliance and appropriate security measures. 
  • Provides IT governance frameworks that will guide the development and refinement of the company’s policies, protocols, and procedures. Typically, these policies will have a direct link to the company’s technology. This is not always the case, though, as some connections are more indirect in nature. 

When all is said and done, an IT framework will serve as the basis for the delivery of the critical information and insights that business leaders and stakeholders need to make data-driven decisions. This is important whether you are developing new policies to ensure regulatory compliance for your financial institution or are seeking to create new protocols and processes that are intended to improve productivity in a regulatory-compliant way.                                       

How Do Investment Banks and Brokerage Firms Benefit From IT Governance Frameworks? 

IT governance is a mission-critical aspect of a company’s larger, overarching technology strategy. This is especially true for investment banks and investment brokerage firms, which have some very precise IT governance requirements that must be considered in order to maintain legal and regulatory compliance. 

IT governance frameworks empower financial institutions such as investment banks and brokerage firms, giving them the ability to more effectively manage risk and mitigate risk. This is done while simultaneously ensuring that their technology meets their business needs and aligns with their business objectives. 

The actual governance framework itself is exactly what it sounds like: templates, forms, and other similar tools that guide users through the process of developing new policies and procedures. 

An IT governance framework also helps in a number of other areas such as the following: 

  • Identification of new strategic objectives;
  • Pinpointing new ways to leverage technology in a way that supports the newly-identified strategic objectives; 
  • Identifying new vulnerabilities, risk factors, and emerging threats that could endanger your organization, its technology, its clients, and its interests. 

IT governance frameworks can also be leveraged as a tool when a financial institution begins work on the development of its long-term strategic plan. The framework organizes key data points and serves as a platform with dashboards for the presentation of useful data visualizations, news feeds, and other important information. Business leaders can then use these insights to ensure that all of their strategic goals are in alignment with their technology.  

The Best Technology for IT Governance and ITIL Frameworks for Investment Banks and Brokerage Firms

A well-developed IT governance strategy will fall short if it lacks the right technology to support the financial institution’s efforts. This is especially true for investment banks and investment brokerage firms, which are subject to stringent regulatory oversight. As a result of this intense oversight, these companies have a complex risk management landscape that demands the right technology to support the organization’s efforts. 

At iTech, we specialize in a variety of ITIL and IT governance solutions, including risk management and data software platforms. We take a collaborative approach with each client to gain an understanding of their challenges, operational pain points, business needs, and strategic objectives. Then, we develop a high-tech solution that supports the client’s goals. This is in addition to addressing their pain points. We invite you to reach out to the iTech team today to initiate a dialogue about your operational processes, governance practices, business strategy, and beyond.