IT Compliance for Financial Services: FCA, GDPR, & ISO 27001

Staying compliant in financial services means keeping pace with a complex mix of regulations - from the FCA’s conduct rules to UK GDPR and the Data Protection Act.

But compliance doesn’t have to be complicated. At Ratcliff IT, we’ve worked closely with financial services firms for years, helping them meet these obligations with ease.

In this guide, we’ll break it down in plain terms, explaining the key requirements and showing how to make compliance straightforward.

The Importance of IT Compliance in the UK Financial Sector

Regulatory compliance isn’t just about meeting legal requirements or avoiding fines, it’s about control. When compliance is integrated into everyday processes, it changes how technology works for your business. Instead of reacting to risks, you operate with control and foresight - improving resilience and creating the foundation for sustainable growth.

Key IT Compliance Regulations and Standards in the UK

If you’re running a financial services firm in the UK, there are several key regulations you’ll need to be aware of. Here’s an overview of the ones most likely to apply to your business.

Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)

The FCA and PRA oversee how financial firms in the UK run their operations, and IT systems are a central part of that. Their goal is to make sure firms are resilient, well-governed, and able to protect customers from harm.

FCA Principles for Businesses

The FCA’s 12 principles are there to guide how financial firms should operate. Below are the five that you'll need to know to keep your IT systems compliant.

• Strong management and control – This means having clear processes, governance and risk management in place. From an IT perspective, that’s about making sure your systems are secure, optimised and protected against cyber threats.

• Financial prudence – Firms must keep adequate financial resources. In practice, that also means ensuring IT budgets are well-planned so you can invest in the right tools, security and support without overspending or cutting corners.

• Clear client communication – Communications with clients should always be fair, accurate and not misleading. Your technology plays a big part in this, whether it’s through secure email, compliant record-keeping, or communication platforms that ensure the right information gets to the right people.

• Protecting client assets – Firms are responsible for safeguarding money, data and property entrusted to them. That requires robust cyber security, data protection measures and access controls to keep sensitive financial information safe.

• Open regulator relationships – The FCA expects firms to be cooperative and transparent. Reliable technology makes this easier, ensuring you can provide accurate reports, evidence and audit trails when requested.

Governance and Accountability for IT Systems

The FCA and PRA expect firms to show clear ownership of IT risk. Policies should be written down, responsibilities defined, and reviews carried out regularly so that regulators can see evidence of proper oversight.

Outsourcing and Third-Party Risk Management

When you outsource IT services, the FCA is clear: you’re still responsible for making sure things run properly. That means choosing a provider that’s qualified and reliable, and having a way to check they’re doing what they promised. If standards drop, you need to step in quickly.

It also means keeping enough know-how in your own team to manage the relationship. Contracts should give you the right to walk away if things aren’t working, without disrupting your clients. A good provider will be open about any issues, protect your data, and cooperate with regulators if needed.

Operational Resilience for Important Business Services

Firms must identify the services that are most important to their customers and the wider market - things like payments or online banking platforms. Then they need to define how long those services could be down before causing serious harm and run tests to prove they could recover within that time.

Cyber Resilience Testing: CBEST, STAR-FS

The FCA and Bank of England support intelligence-led testing frameworks such as CBEST and STAR-FS. These go beyond basic checks, simulating real-world cyber attacks to uncover vulnerabilities before attackers exploit them.

UK GDPR and Data Protection Act 2018

The UK GDPR and the Data Protection Act explain how personal data must be handled. For financial organisations, this covers everything from customer account details and payment information to sensitive personal data.

The aim is simple: protect people’s information and make sure it’s only ever used in the right way.

Data Collection and Processing Principles

When you collect and use personal data, there are clear rules to follow. The Data Protection Act outlines that data must be:

• Used fairly, lawfully and transparently

• Used for clear purposes

• Limited to only what you need

• Accurate and up-to-date

• Kept only as long as necessary

• Secure and protected from unauthorised access, loss or damage with strong cyber security

Customers have a set of rights over their personal data. These include the right to know how it’s used, access it, correct mistakes, and have it erased. They can also object to how their data is processed, restrict certain uses, or move their data to another provider.

Records of Processing Activities (RoPA)

Every firm should keep a Record of Processing Activities (RoPA). Think of this as your data map - a clear record of what data you hold, why you hold it, where it sits, and who can access it. Having this in place makes compliance simpler and gives you confidence if regulators or auditors come knocking.

Data Protection Impact Assessments (DPIAs)

A Data Protection Impact Assessment, or DPIA, is a way to make sure any activity involving personal data is safe, compliant and well thought through. It’s required whenever data processing could pose a high risk to individuals, such as large-scale monitoring or handling sensitive categories of information.

A good DPIA will:

• Explain what the project involves and why the data is being processed.

• Check that the approach is necessary, proportionate and compliant with data protection law.

• Identify possible risks to people’s privacy and rights.

• Outline the steps you’ll take to reduce or remove those risks.

It’s not something you should do alone. Your Data Protection Officer (if you have one) should be involved, and in some cases you may also need to consult individuals, experts or processors who are part of the project.

Data Protection Officer (DPO)

Some firms are required by law to have a Data Protection Officer (DPO). While most financial services firms fall outside this mandatory category, you can still choose to appoint one voluntarily to strengthen governance and oversight.

The position can be held by a qualified member of your existing team or outsourced to an external specialist - the key is that they have the independence and expertise to oversee data protection effectively.

Breach Notification Obligations

If personal data is compromised, firms have 72 hours to report serious cases to the ICO. Having an incident response plan and reliable reporting processes is essential to meeting this requirement.

ISO/IEC 27001: Information Security Management Standard

ISO/IEC 27001 is the world’s leading standard for information security management systems. It gives businesses a clear framework for managing risks, strengthening controls, and showing that security is taken seriously.

How Do You Become ISO Certified?

Getting certified is about building a structured approach to information security that stands up to scrutiny. To achieve ISO 27001, you’ll need to:

• Put in place clear policies and processes for staff to follow.

• Carry out regular risk assessments and show how risks are being managed.

• Provide training so everyone knows their role in keeping data secure.

• Apply the right mix of physical security (like access controls or CCTV) and technical security (like encryption, antivirus, and secure system setups).

• Keep records and internal audits that demonstrate continual improvement.

It can feel like a big task, but that’s where we come in. At Ratcliff IT, we break it down, guide you step by step, and handle the technical details, so you can focus on running your firm while we make sure the certification process is handled properly.

Find out more about how we make ISO certification easy.

Why Become ISO Certified?

ISO 27001 gives you:

• Trust and credibility – Reassure customers, partners, and regulators that your business meets internationally recognised standards.

• Stronger security – Reduce the chance of breaches or data loss with a framework that covers both people and technology.

• Regulatory confidence – Demonstrate alignment with FCA, PRA, and GDPR requirements, reducing audit pressure.

• Payment Services Regulations 2017

  The Payment Services Regulations 2017 (PSRs) set the legal framework for payment services in the UK. If you provide payment services as part of your business, you must be authorised or registered. These rules are designed to keep payments safe, transparent, and fair for everyone.

  Who is Affected by PSRs?

  The PSRs apply to a wide range of firms, including:

  • Banks

  • Building societies

  • E-money issuers

  • Money remitters

  • Non-bank credit card issuers

  • Non-bank merchant acquirers

  • Providers of account information services (AISPs)

  • Providers of payment initiation services (PISPs)

  If you fall into one of these categories, the regulations shape how you manage customer money, security, and compliance.

  What are the Requirements?

  Let's go into what's required under the PSRs:

  • Strong Customer Authentication (SCA) – Most online payments now require multi-factor authentication. This means using two or more checks (like a password and a code sent to a phone) to keep transactions safe from fraud.

  • Capital & safeguarding – Firms must show they have enough financial backing and keep customer money separate and protected. Clear processes, supported by well-managed systems and trusted partners, help make this easier to maintain.

  • Record keeping & agents – Compliance records need to be kept for five years, and any agents working on your behalf must be registered with the FCA and supervised.

  • Information rules – Customers have the right to clear, timely information about their payments, fees, and contracts. Automation and secure platforms can make sure this information is delivered accurately and on time.

  • Execution & liability – Payments must be timely, accurate, and authorised. Firms are expected to detect fraud, prevent errors, report issues, and resolve complaints quickly. Reliable monitoring and alerting give you confidence that nothing slips through the cracks.

  • Access to payment systems – Banks and providers must give fair access to payment systems and accounts. A resilient infrastructure helps ensure connections remain secure and always available.

PCI DSS (Payment Card Industry Data Security Standard)

PCI DSS is the global standard for keeping card payments secure. It was developed by the major card schemes to make sure businesses handle card data safely and consistently.

Not Law, but Still Essential

PCI DSS isn’t written into UK legislation, but it is a contractual obligation. If your firm processes, stores, or transmits card data, you’re expected to comply under your agreement with Visa, Mastercard, and other providers. Non-compliance can lead to fines or even losing the ability to process card payments.

What PCI DSS Requires

PCI DSS is built around these core requirements:

• Secure systems – Using tools like firewalls and strong settings to keep your network safe from attacks.

• Protecting data – Keeping card details safe when stored and using strong protection whenever they’re sent over the internet.

• Vulnerability management – Keeping systems and applications updated, and malware under control.

• Access control – Only giving people access if they need it, using proper authentication, and controlling physical access to sensitive data.

• Monitoring and testing – Logging access, monitoring activity, and testing your defences regularly.

• Security policies – Having clear, organisation-wide policies and practices.

How Can Financial Firms Stay Compliant?

Strong compliance is built on good governance, secure systems, and a culture of accountability. Here are some best practices firms should follow:

Assessing Your IT Infrastructure Compliance

Many firms only discover weaknesses in their IT setup after an audit or, worse, a security incident. GDPR assessments and security assessments aim to prevent this by highlighting risks before they become problems.

• A GDPR assessment reviews how personal data is collected, stored, and protected, making sure your processes hold up under data protection law.

• A security assessment tests your systems and networks to expose vulnerabilities before attackers or auditors do.

In addition to this, a cyber security consultant can benchmark your systems, close the gaps you may not see, and design security measures that fit your business without unnecessary complexity.

Governance, Risk, and Compliance (GRC)

Both investors and cyber insurers now look for proven evidence of strong governance and cyber security. Frameworks like Cyber Essentials Plus and CIS v8 / CAF v4 set the standard - showing that a firm takes risk management seriously.

Admin Rights

Administrator rights give users full control over systems - which also makes them one of the biggest security risks. If an attacker compromises an admin account, they gain unrestricted access across networks, data, and applications. That’s why every major framework, including ISO 27001, treats privileged access as critical.

To reduce exposure and maintain compliance:

• No day-to-day work should ever be carried out from an admin account.

• Use separate, unique admin accounts only for defined technical tasks such as software installation or configuration.

• Keep a central register of all admin accounts, with clear business justification for each.

• Review and remove unnecessary access quarterly.

• Apply multi-factor authentication (MFA) to every admin account.

• Document each account and its role in your Incident Response (IR) and Disaster Recovery (DR) plans.

• For non-IT staff managing user changes (joiners, movers, leavers), assign only limited admin roles (for example, “User Manager” in Google Workspace or “Helpdesk Admin” in Microsoft 365) and record these permissions within the same review and recovery process.

Incident Response and Recovery

When things go wrong, speed and structure matter. Regulators expect firms to detect incidents quickly, report them on time, and minimise impact. Having predefined plans for who to contact, how to restore services, and how to reassure customers is essential.

Leveraging Technology

Technology is no longer just an enabler of compliance, it’s essential to sustaining it. The right tools reduce manual errors, increase visibility, and help firms stay one step ahead.

At Ratcliff IT, for example, we use a layered setup that keeps compliance continuous and measurable:

• Strong authentication: Tools like Cisco Duo, ID Agent, and Traceless protect identities, credentials, and access across every device.

• 24/7 threat monitoring: Through our partnership with a world-leading Security Operations Centre (SOC), every alert is analysed in real time, and threats are contained before they cause disruption.

• Instant recovery: Using SentinelOne, we can isolate compromised devices and roll systems back to a clean state within minutes.

This proactive approach turns compliance from a checkbox exercise into an ongoing, automated process that keeps your firm secure and audit-ready every day.

Award-Winning IT Support for Financial Services from Ratcliff IT

When it comes to IT support for financial services, there’s no room for trial and error. You need an IT partner who understands the regulations, knows how financial firms operate, and can translate complex requirements into practical solutions. That’s exactly what we do at Ratcliff IT.

We’ll help you:

• Stay compliant – We carry out audits to ensure your systems always meet the essential standards. With years of experience supporting financial firms, we identify compliance risks proactively and keep you informed, so you’re never caught off guard.

• Achieve certification – Whether you’re working towards Cyber Essentials Plus, ISO 27001, or another recognised standard, we’ll guide you through every step - from gap analysis to implementation and evidence gathering.

• Strengthen security – Our layered security approach includes immediate escalation when an incident is detected, automated isolation of compromised machines, and full coordination with your wider incident response and recovery plan.

• Empower your people – We help build a security-aware culture with access to the world’s largest library of awareness training. Interactive modules, videos, and campaigns keep learning engaging and effective, while automated reminders and reporting dashboards make it easy to track progress and prove ROI.

We take the time to understand how your business works, then design IT systems around you. Onboarding is easy - handled entirely by our team - and you’ll always know exactly what’s happening at every step.

Find Out More

Frequently Asked Questions

We've answered your most common questions on IT compliance for financial services below.

What are the Main IT Compliance Regulations for UK Financial Services Firms?

Compliance in the financial services industry means protecting critical data, managing cyber risks, and making sure data quality is maintained across your systems. The FCA and PRA set the main rules in the UK, supported by laws like UK GDPR, the Data Protection Act 2018, and the Payment Services Regulations 2017.

What is FCA Compliance?

FCA compliance means having systems and processes in place to manage cybersecurity risk management, protect data, and support the wider financial industry.

Are There Different Regulations Depending On Where an Organisation is Located?

Yes, regulatory requirements vary from country to country. In the US, for example, investment firms and other financial institutions answer to the Securities and Exchange Commission (SEC). But if your business is based in the UK, you don’t need to think about that. The FCA and PRA set the rules here, and those are the ones that matter for your compliance.

Is ISO 27001 Mandatory for Financial Firms in the UK?

ISO 27001 isn’t compulsory for financial firms in the UK, but it’s the gold standard for proving you have strong ICT risk management in place.

Many financial firms (especially in the banking sector) become ISO certified because it builds trust and puts them ahead of regulator expectations. At Ratcliff IT, we guide clients through the process so certification doesn’t feel like an uphill battle.

What Are Some of the Biggest Challenges Financial Firms Face with IT Compliance?

The biggest challenge for many firms is keeping up with change. New technologies like artificial intelligence (AI) create opportunities, but they also introduce risks, which is why it's important to emphasise AI governance around how AI technologies are used in your business.

On top of that, firms often struggle with maintaining accurate financial records, especially when software doesn’t work properly. This makes it essential to embrace digital transformation, both to modernise systems and to spot potential threats early. These threats range from financial fraud to other financial crimes, and they can quickly undermine trust if not managed well.

Our compliance team at Ratcliff IT work with clients to tackle these challenges head-on - helping you put the right systems in place, reduce risk, and make compliance feel secure rather than stressful.