In finance, trust and reliability are the king. Thus, in order to ensure that the clients, stakeholders and regulatory bodies have confidence with their financial institution, they must ensure that they have configured their processes to meet the international standards. Getting ISO certification is one of the best ways to prove this.

ISO (International Organization for Standardization) certifications are standards worldwide recognized that guarantee that an organization complies with the best practices in the quality management, information security and the operational efficiency. Ultimately, ISO certification gives financial institutions the credibility needed and improved overall performance while designing a framework for better internal processes.

This is a step by step guide for financial institutions to progress through the ISO certification process:

1. Importance of Certification

ISO certification offers numerous benefits for financial institutions:

• Credibility and Trust: This is what demonstrates that the institution is adhering to international best practices as evidenced to the clients, partners and other stakeholders.
• Regulatory Compliance: Many of the ISO standards that align to regulatory requirements are also things that institutions can do to remain compliant with legal obligations.
• Operational Efficiency: ISO standards are adopted to streamline, cut out inefficiencies and improve overall performance.
• Risk Management: ISO 27001 (information security) can be used by financial institutions to mitigate risks in data sensitive environments.

ISO certification is one of the tools to improve the image of an institution by assuring the world that it is ready to do nothing out of the ordinary, but to provide quality, security and constant improvement, in an industry whose reputation, and trust is its foundation stone.

2. The ISO Standard to Choose

The first step towards the certification journey is to figure out which ISO standard fits your institution’s objectives and requirements. Financial institutions commonly pursue the following ISO standards:

ISO 9001: Quality Management Systems

• Focus: It also improves processes and keeps a consistent service quality to achieve customer satisfaction.
• Relevance: Very good for institutions that want to demonstrate operational excellence and customer centricity.

ISO 27001: Information Security Management 

• Focus: Through robust information security controls it protects sensitive financial data.
• Relevance: Companies in the financial sector (banks, investment firms and insurance companies) that handle large amounts of sensitive customer information.

ISO 22301: Business Continuity Management (BCM) 

• Focus: This enables organizations to operate during the time when disruptions strike.
• Relevance: For example, institutions that can’t afford to stop working when systems fail or a natural disaster occurs.

ISO 31000: Risk Management

• Focus: It is a framework for the identification, assessment and management of risk.
• Relevance: Important for institutions that carry out risk sensitive operations like lending, investment and asset management.

Based on the institution’s strategic priorities, scope of operations and regulatory requirements, the right standard is selected.

3. Certification Process

Once you’ve chosen the right standard, the certification process involves several key steps:

Step 1: Gap Analysis

• Assess your current processes, policies, and controls against the requirements of the ISO standard you have chosen for your company.
• Which criteria are not being met? What areas do we need to work on to change that?

Step 2: Create an Implementation Plan

• A detailed action plan is to be made to fill the gaps and to take the processes to the ISO standard.
• An implementation should be realistic, and roles and responsibilities of team members should be assigned.

Step 3: Employee Training and Awareness.

• It is important that employees be educated about how ISO certification is important to them and how they can help achieve it.
• Learn new processes, policies and best practices.

Step 4: Implement Changes

• The standard may require existing processes to be updated or new processes brought in.
• It consists of documented processes, controls and procedures in its completeness.

Step 5: Internal Audit

• Evaluation of compliance to the standard of ISO using internal audit.
• Ensure that non conformities are found and corrected before external audit.

Step 6: External Audit

• Enroll with a certified external auditing body to judge the degree of compliance with ISO standard of your institution.
• The auditor will review documentation, inspect processes and interview staff to see if the company is ready for certification.

Step 7: Certification

• The ISO certification is passed, when your institution passes the external audit.
• They are valid for 3 years and require yearly surveillance audits to keep them certified.

Common Challenges

But ISO certification is a rewarding journey with challenges. Being aware of these hurdles can help financial institutions prepare effectively:

Resource Allocation

• Challenge: It takes a lot of time, effort and money.
• Solution: But you need to allocate good enough resources at the get go, and get key stakeholders involved early on.

Resistance to Change

• Challenge: New processes, or changes to existing work processes might be resisted by employees.
• Solution: Showcasing the benefits of being ISO certified and giving the intensive training to ensure a culture of acceptance.

Complex Documentation

• Challenge: ISO standards require excessive documentation.
• Solution: ISO certified consultants provide templates and tools to make it simple.

Meeting Stringent Criteria

• Challenge: ISO standards for information security and risk management are usually very difficult for financial institutions to meet.
• Solution: An in depth gap analysis should be done and help should be sought from the experts to resolve the deficiencies.

We’re expecting these challenges and proactively taking steps to ensure that financial institutions have a more efficient certification process.

Conclusion

The benefits of ISO certification as a financial institution’s commitment to quality, security and operational excellence cannot be over emphasized. Internationally recognized standards enable institutions to create trust with clients, meet regulatory requirements and compete in the marketplace.

Certification is rigorous, but with the right planning, resource allocation and employee engagement it is possible to achieve. In addition, those financial institutions that actually manage to obtain ISO certification enjoy a boost in their business reputation and can therefore hope to be successful in the long run.

If you choose to work with a certified body such as IRQS (Indian Register Quality Systems), certification can be a very easy process. IRQS is a pioneer in the delivery of ISO certifications and is a dependable partner for the financial institutions which need to fulfil the global standards and show their respect to the trust and transparency.