South Africa’s financial sector is undergoing significant regulatory transformation, with a strong focus on Information Technology (IT) governance and cybersecurity. The Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) have introduced new IT compliance requirements through Joint Standard 1 of 2023: Information Technology (IT) Governance and Risk Management, which takes effect on 15 November 2024, and the Joint Standard on Cybersecurity and Cyber Resilience Requirements, which becomes enforceable from 1 June 2025.

These new regulations will require financial institutions to establish robust IT risk management frameworks, cybersecurity protocols, and governance structures to mitigate risks associated with digital transformation. IT companies play a crucial role in helping businesses navigate these regulatory changes by providing innovative solutions and expert guidance. Given the complexity and high stakes involved in compliance, SG Consulting offers expert guidance and tailored solutions to help organisations meet these requirements efficiently and effectively.

Understanding the Regulatory Changes

Joint Standard 1 of 2023: IT Governance and Risk Management (Effective 15 November 2024)

This Joint Standard sets out key principles for IT governance and risk management, ensuring financial institutions implement sound practices to prevent IT failures and cybersecurity breaches. It applies to various financial institutions, including:

• Discretionary and administrative Financial Service Providers (FSPs)
• Banks and their branches, including foreign institutions
• Mutual banks
• Insurers and controlling companies of insurance groups
• Market infrastructures
• Managers of collective investment schemes

Key Requirements

• Robust IT Risk Management Framework: Institutions must establish a framework that effectively identifies, assesses, mitigates, and monitors IT-related risks.
• Integration with Business Strategy: IT governance and risk management must align with the financial institution’s broader operational strategy.
• Board and Senior Management Oversight: Clear responsibilities for IT governance must be assigned to senior management and board members.
• Incident Response Plans: Institutions must have incident response and recovery plans to handle IT disruptions and cyber threats.
• Third-Party IT Risk Management: Companies must evaluate and monitor risks associated with outsourcing IT services.
• Proportionality Principle: Smaller institutions may receive tailored compliance guidance, ensuring that regulatory burdens do not disproportionately impact them.

Joint Standard on Cybersecurity and Cyber Resilience Requirements (Effective 1 June 2025)

This standard focuses specifically on cybersecurity and cyber resilience, recognising the increasing threats facing the financial sector. Financial institutions must ensure that they have effective cybersecurity controls and resilience strategies to mitigate potential breaches and service disruptions.

Key Cybersecurity and Cyber Resilience Requirements:

• Comprehensive Cybersecurity Framework: Institutions must develop and maintain an adaptive security framework to address evolving cyber threats.
• Data Protection and Encryption: Strong encryption policies and secure data storage solutions must be implemented.
• Regular Vulnerability Assessments: Organisations must conduct periodic cybersecurity assessments, penetration testing, and audits.
• Security Awareness Training: Employees must receive regular training on cybersecurity best practices.
• Incident Response and Recovery: Institutions must develop and test comprehensive incident response and disaster recovery plans.
• Regulatory Reporting and Compliance: Organisations must demonstrate ongoing compliance through documentation and regulatory reporting.

The Importance of Compliance

The rapid digitalisation of financial services has increased the sector’s vulnerability to cyberattacks, IT failures, and data breaches. Non-compliance with these new standards can result in regulatory penalties, reputational damage, financial losses, and increased cyber threats.

To avoid these risks, financial institutions must act swiftly to implement IT governance and cybersecurity strategies that align with regulatory expectations. However, compliance is not just about avoiding penalties— it also enhances business continuity, strengthens customer trust, and ensures resilience in an increasingly digital economy.

ASG Managed IT Services specialises in IT risk management, cybersecurity, and regulatory compliance solutions for South African financial institutions. Our expert team provides end-to-end support in meeting the new regulatory requirements, ensuring a seamless transition to compliance.

Our Compliance Services

ASG assists financial institutions in developing and implementing IT governance frameworks that align with regulatory mandates. Our services include IT risk assessments, gap analyses, and the creation of policies and procedures to ensure full compliance. We also provide IT governance training for executives and employees to embed risk management best practices within an organisation.

As cyber threats evolve, financial institutions must enhance their cybersecurity measures. ASG conducts cyber risk assessments, penetration testing, and security infrastructure enhancements to protect sensitive data. We develop threat detection strategies, incident response plans, and access control measures to ensure institutions meet regulatory cybersecurity standards.

Compliance audits and readiness assessments are essential in preparing for upcoming regulatory deadlines. Our team conducts in-depth audits to identify vulnerabilities and recommends corrective actions to ensure financial institutions achieve full compliance.

To minimise operational disruptions, ASG provides incident response and business continuity planning. We design and test response plans, establish crisis communication strategies, and conduct cyber incident drills to ensure resilience against cyber threats.

For financial institutions that engage third-party IT service providers, we offer vendor risk assessments, third-party compliance monitoring, and outsourcing governance frameworks. This ensures that external partnerships align with regulatory requirements.

Additionally, we provide customised training programs to equip employees and management with a thorough understanding of regulatory obligations and cybersecurity best practices, fostering a proactive compliance culture within financial institutions.

Steps to Achieve Compliance Before the Deadline

Financial institutions must take a proactive approach to compliance. We recommend the following roadmap:

• Conduct a Compliance Gap Assessment: Evaluate current IT governance and cybersecurity frameworks against the new regulatory requirements.
• Develop a Compliance Strategy: Identify and prioritize areas that need immediate improvement.
• Implement Security Controls: Deploy necessary technical and procedural safeguards.
• Train Employees: Educate staff on IT governance, cybersecurity, and regulatory compliance.
• Monitor and Update Policies: Regularly review and refine compliance measures to stay aligned with regulatory changes.
• Engage with ASG: Leverage our expertise to navigate compliance efficiently and effectively.

Act Now to Ensure Compliance and Strengthen Cyber Resilience

With the enforcement deadlines for Joint Standard 1 of 2023 (15 November 2024) and the Cybersecurity and Cyber Resilience Requirements (1 June 2025) fast approaching, financial institutions in South Africa must act decisively to ensure compliance. These regulations are not just about meeting legal obligations—they are crucial for protecting financial institutions from IT failures, cyber threats, and regulatory penalties.

Proactive compliance will not only safeguard your organisation but also enhance operational resilience, customer trust, and long-term business sustainability in an increasingly digital financial ecosystem.

ASG Managed IT Services is ready to support financial institutions through risk assessments, security enhancements, compliance audits, and regulatory training. By leveraging ASG’s expertise, organisations can navigate these regulatory changes with confidence, ensuring seamless compliance before the deadline.

Don’t wait—start your compliance journey today. Contact ASG to assess your readiness and implement a tailored strategy to meet South Africa’s evolving IT governance and cybersecurity requirements.