Why Generic MSPs Fail Financial Services Compliance

Your MSP keeps the lights on. Email works. The Wi-Fi stays connected. When someone forgets their password, they get it reset in a few hours. By most measures, they're doing their job.

Then your examiner arrives. They ask for your Conditional Access policy documentation. Your MSP doesn't know what that means. They ask how you're enforcing DLP rules to protect customer data. Your MSP set up antivirus and called it done. They ask about your incident response plan. Your MSP has a generic template they downloaded three years ago.

This is what happens when a financial institution hires a generic MSP. The day-to-day IT works fine. The compliance, security, and regulatory readiness doesn't exist. And you won't know it until an examiner, an auditor, or an attacker shows you.

The Problem With Generic MSPs in Financial Services

Most managed service providers build their business around small and mid-size companies that need email, file sharing, and a help desk. Law firms, accounting practices, medical offices, construction companies. The core service is the same for all of them: set up Microsoft 365, deploy antivirus, manage the network, answer support tickets.

Financial institutions look like those companies from the outside. Same size, same software, same basic IT needs. So the MSP sells them the same package at the same price and assumes they're covered.

The gap shows up in three areas that generic MSPs don't have the expertise to address:

• Regulatory compliance. Banks, credit unions, and mortgage companies operate under FFIEC, GLBA, NCUA, OCC, CFPB, and state-level regulators. Each has specific IT security expectations. A generic MSP has never read the FFIEC Cybersecurity Assessment Tool, doesn't understand GLBA Safeguards Rule requirements, and can't produce the evidence packages examiners expect.
• Data classification and protection. Financial institutions handle data that carries strict regulatory obligations: SSNs, account numbers, credit reports, loan documents, wire transfer details. Generic MSPs treat all data the same. Financial services IT requires data classification, DLP policies, encryption enforcement, and access controls calibrated to the sensitivity of the information.
• Audit readiness. Financial institutions get examined regularly. OCC exams, NCUA exams, state banking department audits, GSE seller/servicer reviews. Each examiner expects documented IT controls, evidence of testing, and proof that policies are enforced. Generic MSPs don't maintain this documentation because their other clients don't need it.

Five Ways Generic MSPs Fail Financial Services Clients

1. They Deploy Microsoft 365 Without Configuring It for Compliance

Microsoft 365 ships with powerful security and compliance features. Conditional Access, DLP, sensitivity labels, information barriers, retention policies, audit logging. Out of the box, almost none of these are turned on.

A generic MSP sets up mailboxes, configures basic MFA, and moves on. They don't create Conditional Access policies that block legacy authentication or restrict access from non-compliant devices. They don't configure DLP rules that prevent customer account numbers from being emailed to personal Gmail accounts. They don't set up sensitivity labels that automatically encrypt documents containing loan data.

The result: your examiner sees a Microsoft 365 environment with default security settings, and your institution gets findings. Not because you lack the technology, but because nobody configured it for financial services.

2. They Can't Map Their Work to Your Regulatory Framework

When your examiner asks how your IT controls align with the FFIEC cybersecurity maturity domains, your MSP should be able to answer. When your auditor asks which GLBA safeguards are implemented at the technical level, your MSP should produce a mapping document.

Generic MSPs work from their own service catalog, not your regulatory framework. They can tell you they installed antivirus on every endpoint. They can't tell you how that antivirus implementation satisfies the "cybersecurity controls" domain of the FFIEC CAT at the "evolving" maturity level. The gap between "we did IT stuff" and "here's how our IT work satisfies your compliance requirements" is where generic MSPs fail.

3. Their Security Monitoring Is Passive, Not Active

Most generic MSPs describe their security monitoring as "24/7" because they have a tool that collects logs. Collecting logs and actively monitoring for threats are two different things.

Financial institutions need active threat detection: real-time analysis of sign-in anomalies, impossible travel alerts, credential spray detection, unusual file access patterns on sensitive data stores. A generic MSP's monitoring typically catches obvious things like a server going offline. It doesn't catch an attacker who compromised a loan officer's credentials and is quietly exfiltrating borrower data through a personal OneDrive sync.

4. They Don't Understand Core System Integrations

Every financial institution runs industry-specific software that generic MSPs have never touched:

• Banks: FIS, Fiserv, Jack Henry, Corelation core banking systems. Online and mobile banking platforms. Wire transfer systems. BSA/AML monitoring software.
• Credit unions: Symitar, DNA, Corelation Keystone, CU*BASE. Shared branching networks. CUSO integrations.
• Mortgage companies: Encompass, Byte, LoanSoft loan origination systems. Document management systems. GSE delivery platforms.

These systems connect to Microsoft 365, to your network, and to each other. A misconfigured firewall rule can break wire transfers. A botched patch can take down your LOS. A security policy that's too restrictive can prevent tellers from processing transactions. Generic MSPs approach these systems cautiously at best and dangerously at worst, because they don't understand what they do or how they connect.

5. Their Incident Response Plan Doesn't Account for Regulatory Requirements

When a financial institution experiences a security incident, the response has dimensions that don't exist in other industries:

• Regulatory notification timelines (OCC requires notification within 36 hours for certain incidents)
• SAR filing coordination if the incident involves potential fraud
• Board notification requirements
• Customer notification procedures under state breach notification laws plus federal banking regulations
• Evidence preservation for potential law enforcement involvement and examiner review

A generic MSP's incident response plan says "contain, eradicate, recover, notify." A financial services incident response plan specifies who gets notified at which regulator, in what order, within what timeframe, and what documentation must be preserved. If your MSP doesn't know the difference, you're exposed.

The Real Cost of the Wrong Provider

The cost of a generic MSP isn't the monthly invoice. It's what happens when the gaps they don't cover become problems:

• Examination findings. Regulatory findings require formal remediation plans, consume management attention, and can trigger increased examination frequency. Multiple findings in the same area can escalate to enforcement actions.
• Breach response costs. Financial services data breaches cost more than breaches in other industries because of regulatory fines, customer notification requirements, credit monitoring obligations, and the reputational damage that drives depositors or borrowers to competitors.
• Audit preparation scrambles. When your examiner gives you 30 days' notice and your MSP can't produce compliance documentation, your internal team spends weeks manually assembling evidence that a qualified provider would have maintained continuously.
• Vendor risk management gaps. Your MSP is a critical third-party vendor. If they don't have a SOC 2 Type II report, your examiner will identify that gap in your vendor risk management program. You'll need to either get your MSP certified or replace them.

What Financial Institutions Should Look For Instead

The difference between a generic MSP and a financial services IT provider comes down to five things:

• Regulatory fluency. They should speak your compliance language. Ask them to describe how they'd help you prepare for your next FFIEC cybersecurity assessment or NCUA IT exam. If they can't answer specifically, they haven't done it.
• SOC 2 Type II attestation. Not Type I. Type II means an independent auditor verified their controls work over a sustained period. This protects your vendor risk management program.
• Core system experience. Ask which core banking, credit union, or loan origination systems they've worked with. Names, not generalities. If they say "we can figure it out," that means they haven't done it.
• Compliance documentation. A qualified provider maintains ongoing compliance evidence: Conditional Access policy docs, DLP configurations, encryption verification, endpoint compliance reports. They don't scramble to create it when your examiner asks.
• Financial services client base. How many banks, credit unions, or mortgage companies do they serve? If you'd be their first financial institution, you're paying for their learning curve.

How ABT Is Different

ABT has served over 750 financial institutions since 1999. The company was built specifically for regulated industries, not retrofitted for them.

• Guardian security platform. ABT's Guardian platform continuously monitors Microsoft 365 environments against over 100 security benchmarks calibrated for financial services. It maps findings to regulatory frameworks so you see gaps in FFIEC, GLBA, or NCUA terms, not just raw security scores.
• Microsoft Tier 1 CSP. ABT holds the highest Microsoft partner tier, which means direct engineering support when something breaks at the platform level. Generic MSPs go through standard support queues. ABT escalates directly to Microsoft product teams.
• SOC 2 Type II certified. ABT maintains current SOC 2 Type II attestation, which means your examiner won't flag a vendor risk management gap for your IT provider.
• 40+ banks, 30+ credit unions, 20+ mortgage companies. ABT's team has seen hundreds of regulatory examinations across multiple verticals. They know what examiners look for because they've helped clients prepare for those exams over and over.
• Free security assessment. ABT's Microsoft 365 Security Assessment shows you exactly where your tenant configuration falls short of financial services benchmarks. You'll see the gaps your examiner would find, before they find them.

Frequently Asked Questions

Next Steps

If you're not sure whether your current MSP is meeting financial services standards, the fastest way to find out is to test your environment against financial services benchmarks.

• Get your free security grade. ABT's Microsoft 365 Security Assessment evaluates your tenant configuration against the benchmarks that examiners and auditors expect. You'll see exactly where the gaps are.
• Talk to a specialist. Schedule a conversation with ABT's team to discuss your institution's specific compliance requirements and IT challenges.