Recent deregulation proposals have made some banks question the need for strict compliance programs. But this viewpoint misses the main purpose behind risk management: To protect your organization against financial harm. In the face of market instability, data breaches, and other dangers, the GRC banking framework is more valuable than ever. What does GRC involve in banking?
What Is GRC in Banking and Finance?
GRC stands for governance, risk, and compliance. These three pillars are the foundation of an enterprise-wide framework that defines how your organization manages its operations at every level. GRC helps banking and finance companies construct a risk-aware environment that integrates regulatory requirements, technology investments, cybersecurity, and other organizational priorities.
Governance
Governance is what brings a GRC framework to life. It provides a cohesive structure and ensures that objectives translate into real action:
- Identifying current gaps and developing organization-specific solutions
- Guiding policy creation
- Empowering roles to successfully manage program implementation
- Centralizing risk and compliance management
- Aligning regulatory requirements with your organization’s priorities
- Developing an effective audit process
Strong governance means that banks tackle risks and regulatory challenges as an organization instead of leaving decisions up to individual departments or branches. GRC helps your company share and use data efficiently.
Risk
Risk management is vital for banks, private lenders, investment firms, insurers, accounting firms, and Fintech companies. The banking and financial services sector has to deal with numerous types of risk constantly:
- Credit risk
- Liquidity risk
- Market and interest rate risks
- Operational risk
- Cybersecurity risk
- Vendor risk
There are also strategic, regulatory, and reputational risks to consider and manage. How your organization approaches each type of risk has a massive impact on operations, client relationships, profitability, and data security. GRC provides a standardized approach to risk assessments, decisions, audits, and controls.
Compliance
Even though compliance is listed last in GRC, it’s actually what sets the framework apart. To maintain compliance in banking, organizations must follow government and industry regulations, including SEC requirements, Title 12 standards, FCID rules, and PCI DSS best practices.
By adopting a GRC approach, banks can make compliance a central part of their operations. In other words, compliance should happen holistically instead of adding rigid structures that are a poor fit for your policies.
Why Is GRC Important in the Banking Industry?
GRC isn’t the only way to manage risk as an organization, but it’s one of the best ways. It fits the unique risk and compliance environment of financial services companies exceptionally well.
A Different Risk Environment
Traditional risk management approaches are starting to show cracks. Handling risk through insurance isn’t effective with the continual and systemic levels of risk that modern banks, insurers, payment gateways, and other financial organizations face. Instead of dealing with risk events after the fact, you need to anticipate, prevent, or mitigate them to minimize the dangers to your operations.
Continually Shifting Regulations
The regulations that apply to your organization can change quickly, and individual requirements also shift frequently. One administration can relax rules only for policymakers to shift the goalposts a few months or years later.
This regulatory complexity is especially challenging for banking and investment firms that operate globally. In addition to laws related to financing and trading, data privacy and security regulations like GDPR can come into play.
A standardized framework can streamline your compliance efforts. When all departments follow the same playbook and have access to the same up-to-date guidelines, organizations become more agile at compliance. Instead of confusion and conflicting ideas, your institution takes a unified road to implementation.
Increasing Cybersecurity Risks
Events in 2024 and 2025 have hammered home the seriousness of cyber risks for banks, insurers, and investment firms:
- January 2024: A ransomware attack against mortgage lender LoanDepot results in the theft of sensitive data on more than 16 million clients, exposing the company to litigation and financial losses.
- January and February 2024: Cybercriminals use two zero-day exploits to breach the network of authentication provider Ivanti. State-sponsored hackers used stolen client data against critical infrastructure, including finance and consulting enterprises.
- February 2024: Major payment provider Change Healthcare experiences one of the worst data breaches in history, watching as ransomware freezes its platform and exposes the records of more than 100 million Americans. Experts anticipate the financial, legal, and regulatory fallout from this breach to cost more than $1 billion.
- February 2025: Bybit, a large cryptocurrency exchange in Dubai, loses nearly $1.5 billion in funds (including 400,000+ ETH). The thieves took advantage of a compromised workstation to exploit the company’s transfer approval software and make employees believe they were processing an internal movement of funds.
- August 2025: Salesforce customers panicked after learning about a large-scale data breach at the company. A few weeks later, threat actors stole records from clients Palo Alto, Cloudflare, Zscaler, Cato Networks, and others.
A common misconception is that hackers have given up on attacking targets in the financial sector because of the industry’s robust infosec practices. In reality, bad actors are always looking for an opportunity to attack vulnerabilities.
Cyber Risk Unpredictability
It’s not just the frequency of cyberattacks that makes them dangerous to financial organizations; the nature and scale of cybersecurity risks have also shifted. These days, system vulnerabilities can come from unexpected sources, such as insider threats who are receiving compensation from cybercriminals. This was the story behind Coinbase’s May 2025 cyberattack.
Breaches that impact software partners can expose your company’s data to ransomware attacks. This occurred in 2024 when hackers successfully stole a large trove of customer data from cloud hosting provider Snowflake, without the company even realizing it. They later used the information to attack targets in multiple industries, including Santander Bank.
You don’t have months to take action after learning about supply-chain breaches. Your team needs to have vendor risk management procedures in place and ready to deploy. GRC data promotes risk awareness, cyber-resilience, and strategic risk mitigation strategies.
How Does GRC Help Banking and Financial Services Organizations?
Choosing to implement GRC in banking, financing, and Fintech/SaaS is a forward-looking investment. Instead of resolving one-off problems, you give your organization the tools to handle the unexpected.
Reducing Fraudulent Activity
GRC emphasizes ongoing management instead of dead rules. The framework’s enhanced risk management practices can make your system more sensitive to threats, including:
- Suspicious network traffic and phishing attacks
- Insider threats, including accidental vulnerabilities
- Fraudulent financial transactions from customers
- Potential fraud involving business partners or vendors
Ideally, GRC helps you flag suspicious activity by employees, cardholders, customers, and service providers before risks turn into exploits. That way, you can stop or minimize the damage.
Supporting Data-Driven Decisions
When a single person makes risk decisions without a standardized frame of reference, the results are closer to an educated guess than a statistical analysis. With GRC, you can define acceptable risk thresholds, the risk assessment process, prioritization guidelines, follow-up actions, mitigation strategies, and many other guidelines. This harmonizes compliance efforts with your company’s overall risk posture and objectives.
Unifying PCI-DSS, HIPAA, and Other Regulatory Standards
One of the main challenges to compliance for banks and investment firms is how many different frameworks you need to juggle. GRC is an ideal backbone for mapping other regulatory and cybersecurity standards. You can eliminate repetitive tasks and develop processes that check multiple boxes simultaneously. GRC lines up with many areas of PCI-DSS, ISO 27001, HIPAA, BSA, and similar rules.
How Do You Implement GRC Tools for Banks?
The process of implementing GRC in finance or banking varies by the scale of your organization. These stages serve as a general guide.
1. Gap Assessments and Risk Prioritization
You likely already have some risk management processes in place. The first step is to discover what works and what needs to change so you’re prepared for modern risks. Start with a detailed, organization-wide risk assessment that engages with a range of stakeholders.
2. Strategic Goals
Set specific objectives, priorities, and targets for GRC. Increasing compliance rates or improving risk detection and resolution ratios are a few examples. Determine which frameworks you want to map to your GRC program, such as PCI-DSS.
3. Roles and Responsibilities
Put trustworthy individuals or committees in charge of each aspect of risk management, compliance, audits, and data security. Create standardized definitions and a review process for policies. Make sure roles and responsibilities are backed by executive authority.
4. Risk-Informed Policies and Processes
Modify existing policies or create new ones to adhere to current risk and compliance management best practices. Create a centralized location for policy and control documents.
5. Cybersecurity
Include data security best practices throughout your GRC framework. Integrated infosec strengthens and supports risk management, mitigation, resilience, and recovery.
6. Training and Compliance Monitoring
Schedule ongoing training, and track adoption rates at the employee and department levels. GRC tools for banks can help your organization track data points in real time. These insights show you where to pinpoint your resources and what improvements are possible.
7. Workflow Automation
Develop a streamlined workflow that improves reporting across departments. Automate these processes as much as possible, ensuring information gets updated correctly and stored in secure locations.
How Can You Resolve Common Challenges to GRC in Finance?
One of the biggest benefits of implementing GRC in banking and finance is that it can resolve organization-specific obstacles to compliance and risk management. The specific challenges you face depend on your company’s size, services, and regulatory burden, but modern GRC frameworks are powerful, flexible, and resilient.
Challenge 1: Siloed Data
Data silos and GRC don’t work well together. When different areas of your organization have their own procedures for managing risk and making decisions, it can cause many problems:
- Redundant compliance efforts
- Competing or contradictory priorities
- Employees following outdated policies
- Data breaches that could and should have been prevented
- Regulatory violations due to unclear processes
Financial institutions with poor data sharing are like buildings that have solid security in front but a door wide open in the back. One department may take smart actions against risks that the other departments don’t even know about, leaving your network vulnerable just the same.
Breaking down silos requires expert planning. Data governance for banks involves mapping your information workflow, determining what regulatory requirements apply, and developing a compliant blueprint for centralized reporting and document storage.
Challenge 2: Resistance to Change
When a firm’s leadership has been following a certain way of doing things for decades, efforts to implement policy changes can meet with resistance. Department heads who are used to making decisions alone may not relish the idea of collaborating in a committee. This is a problem because executive buy-in is essential for new governance strategies to succeed.
One solution is to involve those experienced stakeholders extensively in the process of crafting new standards. Whenever possible, keep management roles and responsibilities in the hands of experts in the field, but in close collaboration with company leadership. Top-down governance is more about unified standards than micromanagement.
Strengthen executive buy-in with concrete financial benefits. Instead of talking about reducing the probability of data breaches, show how much revenue your organization stands to make by increasing customer trust and avoiding platform shutdowns.
Challenge 3: Investment of Resources
Implementing and following through with a GRC framework takes time, money, and effort, such as performing quantitative risk assessments. Internal and external audits also have a cost.
In reality, this is the case for any type of organizational improvement. In banking, GRC provides a strong foundation for long-term growth. A standardized approach to risk and compliance saves your company time in the long run, improves productivity, and lowers costs by reducing duplicate efforts.
To make GRC transformations more cost-effective, opt for a phased approach instead of overhauling everything at once. Prioritize the areas that translate into the biggest gains for your company, such as eliminating compliance bottlenecks.
Streamline GRC in Banking With a State-of-the-Art Compliance Monitoring Platform
The GRC framework has a proven track record in the banking industry. It improves risk management with proactive solutions and adaptive controls.
Compyl is a comprehensive platform for managing governance frameworks, cybersecurity controls, risk assessments, and compliance requirements. Accelerate vendor management and leverage your organization’s real-time data with AI-powered GRC tools. Plan, identify, correct, and adapt swiftly and cost-effectively. Request a demo today.
