FINRA Cybersecurity Checklist: Step-by-Step Guide
Sep 4, 2025
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16 min read
Contents
Cybersecurity is a core regulatory concern in the financial services sector. For firms registered with FINRA, especially broker-dealers and hybrid fintech models, there is growing pressure to demonstrate that cybersecurity risks are being identified, mitigated, and documented.
The FINRA cybersecurity checklist is a practical tool designed to help companies assess and improve their cyber risk programs in line with regulatory expectations. However, many teams struggle to interpret what each section requires, who should be involved, or how to turn it into a repeatable compliance process.
This article breaks down the FINRA cybersecurity checklist step by step, exploring what it is, who it is for, and how to use it.
InnReg is a global regulatory compliance and operations consulting team serving financial services companies since 2013. If you need assistance with compliance or fintech regulations, click here.
What Is the FINRA Cybersecurity Checklist?
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees broker-dealers and other securities firms operating in the United States. The FINRA cybersecurity checklist is a self-assessment tool created to help firms evaluate and improve their cybersecurity controls.
While the list is not a formal rule or filing requirement, it reflects what FINRA expects firms to have in place, particularly in terms of protecting client data, managing third-party risk, and responding to cyber incidents.
The FINRA cybersecurity checklist was mainly created to help small and medium-sized investment firms protect themselves from cyber threats. However, it is also useful for financial technology (fintech) companies that FINRA supervises or that work under similar rules and regulations.
The checklist follows proven security methods used across the industry. It covers important areas like:
Keeping track of what data you have
Controlling who can access your systems
Protecting information by scrambling it (encryption)
Having a plan for when security problems happen
In other words, it's a security guide that helps financial companies stay safe online, no matter their size.
However, completing the checklist will not exempt a firm from liability in the event of a breach. The FINRA cybersecurity checklist should be viewed as apractical roadmap to help firms identify gaps, prioritize improvements, and create a structured cybersecurity program that meets supervisory and regulatory standards.
Who Should Use the FINRA Cybersecurity Checklist?
The FINRA cybersecurity checklist’s structure and content make it broadly relevant to any firm under FINRA jurisdiction, particularly those offering innovative or tech-driven financial products.
Fintech companies operating as broker-dealers or those with hybrid business models that involve securities trading, custody, or retail investing will find the checklist especially relevant. It is also a practical reference for compliance officers, legal teams, and outsourced partners responsible for cybersecurity oversight.
Even firms that outsource IT or use third-party platforms should take ownership of their cyber risk posture. FINRA expects that registered entities, not just vendors, can explain, document, and monitor their cybersecurity framework. The checklist provides a way to initiate the process with structure and clarity.
How the FINRA Cybersecurity Checklist Is Structured
The FINRA cybersecurity checklist is formatted as a downloadable Excel workbook. It is divided into multiple tabs, each serving a specific purpose, from scoping your risk profile to documenting how key systems and data are protected.
Download the FINRA cybersecurity checklist Excel workbook to see the entire structure and tabs described below→
The tool is organized into four main components:
Overview tab
Twelve checklist sections
Summary report tab
Built-in references and guidance
The overview tab asks five scoping questions to help define the firm’s size, structure, and business model. Based on your answers, the checklist highlights which of the twelve sections apply to your firm. Most firms will need to complete all twelve sections regardless of size. But this tab helps frame the exercise. It sets expectations and clarifies that the checklist is not one-size-fits-all.
Each of the twelve sections focuses on a specific area of cybersecurity, ranging from data inventory and third-party risk to staff training, intrusion detection, and recovery planning, helping you assess current controls, identify gaps, and reference external best practices. Some questions just need a yes or no answer, while others ask you to write a brief explanation.
Furthermore, the “Summary Report” tab auto-generates a summary of your firm’s cybersecurity posture based on the information entered across the twelve sections. It highlights higher-risk areas and gaps. The report can be used for internal tracking, board-level reporting, or as the basis for follow-up projects. It also helps firms prioritize which risks to tackle first.
Finally, many sections include footnotes and links to FINRA reports, NIST guidelines, and other authoritative sources. There is also a “Resources” tab that consolidates external references. These references explain why each checklist item exists and what a reasonable implementation might be.
How To Use the FINRA Cybersecurity Checklist Effectively
To get real value from the FINRA cybersecurity checklist, treat it as a working document meant to guide your risk management decisions over time.
Best practices for approaching the checklist so that it becomes an integral part of your broader compliance operations include:
Involving the right people: The checklist spans IT infrastructure, vendor relationships, staff training, and written policies. As it touches multiple departments, a small internal working group should own the process. This might include your compliance lead, someone from IT or cybersecurity, and anyone who manages third-party tools or customer data.
Use the checklist as a working tool: Each section of the checklist helps you uncover gaps. Use your findings to build a task list and feed that into your project management system.
Review footnotes and hidden sections: Many tabs include essential context in the lower rows or embedded footnotes. Make it a habit to scroll all the way down each tab. You will find definitions, links to external resources, and examples that clarify what is being asked.
Don’t treat it as a one-time exercise: Revisit the checklist at least once a year, or after significant changes to your tech stack, vendor ecosystem, or business model.
Breakdown of the 12 Sections in the FINRA Cybersecurity Checklist
The core of the FINRA cybersecurity checklist is divided into twelve sections. Each addresses a key domain in a cybersecurity program, from asset identification to breach recovery.
Below is a grouped summary of how the twelve sections work and what they cover:
Section 1-3: Identifying Risks and Third-Party Exposure
The first three sections of the FINRA cybersecurity checklist focus on identifying the source of risk and determining which external parties are involved. These are foundational steps. If asset inventory or third-party mapping is incomplete, everything else in the program, including controls, monitoring, and response, is at risk.
Section 1: Information Inventory
This section asks firms to list all types of sensitive information they collect, store, or transmit. Examples include:
Personally identifiable information (PII)
Customer account credentials
Trading activity and transaction records
Internal financial or operational data
The checklist asks firms to pinpoint where they keep their data, whether it is in cloud apps, on internal systems, in spreadsheets, or with third-party tools. It also classifies the risk level if that data were to be lost or accessed without authorization.
Section 2: Data Minimization
This section helps companies avoid unnecessary risks by collecting less data, limiting how long they keep it, and being careful about who they share it with. It asks questions like:
Are you asking for people's full Social Security numbers when just the last four digits would work?
Do you keep KYC documents forever, even after people close their accounts?
Is your marketing team putting real customer information into advertising websites or outside programs?
From a legal perspective, having less customer data means less trouble if hackers steal your information. From a practical perspective, it makes everything easier. You have fewer people to worry about accessing the data, less information to protect, and less to keep track of.
Section 3: Third-Party Access
This section identifies all vendors, service providers, or partners with access to the firm’s systems or data, including:
Cloud storage providers
Customer onboarding/KYC platforms
CRM, payroll, and HR tools
API partners, custodians, or clearing brokers
The checklist asks whether these third parties have been vetted, whether contracts include cybersecurity terms, and whether ongoing monitoring is in place.
FINRA considers third-party risk a significant compliance concern. Many small firms rely on vendors for core functionality, but often fail to formally assess their controls. If you do not have a vendor risk management framework, this section will highlight that gap.
Sections 4-8: Protecting Systems, Data, and Employees
After identifying your assets and risks, the next step in the FINRA cybersecurity checklist focuses on protection. Sections 4 through 8 outline how a firm safeguards information, systems, and personnel against unauthorized access or misuse.
These sections address not just technology, but also human behavior and internal governance, both of which are common points of failure.
Section 4: Information Asset Protections
This section assesses the protection of sensitive data after it has been collected. It focuses on:
Password policies
Access restrictions
Multi-factor authentication
Encryption practices
In this section, you will need to specify the protections applied to different data types (e.g., client PII vs. internal files) and whether those protections are consistently applied across all storage points, including mobile devices, spreadsheets, and shared drives.
Section 5: System Asset Protections
Section five focuses on systems that store and process data.
This checklist prompts businesses to identify protections on hardware and software assets, including:
Workstations and servers
Networking equipment
Cloud platforms and SaaS tools
It inquires about firewall configurations, antivirus software, patching processes, and role-based access controls. Additionally, if MSPs or IT vendors maintain the systems, clearly outline their responsibilities here.
Section 6: Encryption
This section’s focus is on encryption, determining the methods used:
At rest (in storage)
In transit (when being transmitted)
On employee devices
To complete section six, you will also need to identify the tools and standards used (e.g., AES-256, TLS 1.2 or higher). Incomplete or inconsistent encryption practices are common findings in FINRA exams, especially when sensitive files are shared over email or stored on personal devices.
Section 7: Employee Devices
This section focuses on endpoint security and requires firms to track all devices that access sensitive data, including:
Laptops
Phones and tablets
BYOD (bring-your-own-device) hardware
The checklist asks whether each device is protected with encryption, screen lock, antivirus, and the ability to wipe data remotely if lost or stolen.
Section 8: Controls and Staff Training
Section 8 covers internal governance and awareness by determining:
Who has access to what systems
Are permissions reviewed regularly
Do employees receive cybersecurity training
As phishing remains a top cause of breaches, FINRA expects firms to educate staff on recognizing suspicious activity, using strong passwords, and following proper protocols.
Together, Sections 4 through 8 give regulators and your internal team a view into how well your firm protects what it holds. These are the controls most likely to be tested during exams or incident investigations.
See also:
Section 9-10: Detecting Threats and Intrusions
Prevention alone is not enough. Even well-defended systems can be breached. Sections 9 and 10 of the FINRA cybersecurity checklist focus on the ability to spot vulnerabilities and identify suspicious activity.
Section 9: Penetration Testing
This section determines whether, and how often, the systems are tested for weaknesses, with key points evaluating:
Do you conduct regular penetration tests?
Are automated vulnerability scans performed?
Who runs the tests: internal staff, external vendors, or both?
Is there a process to fix what’s found?
For smaller firms, formal penetration testing may not happen every quarter. However, FINRA still expects some level of testing, particularly for customer-facing systems or those that store sensitive data.
Section 10: Intrusion Detection
This section shifts from point-in-time testing to ongoing monitoring and focuses on:
Intrusion detection systems (IDS) or alerts
Log reviews and audit trails
Who is responsible for monitoring and responding
How alerts are triaged and escalated
If a firm uses a managed IT provider or security service, its role should be clearly defined. This section often reveals whether a firm has true visibility into its systems or is simply relying on assumptions.
Taken together, Sections 9 and 10 are about visibility and responsiveness. A strong cybersecurity program not only aims to prevent incidents but also detects them quickly, limiting their impact and improving the ability to respond under pressure.
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Section 11-12: Incident Response and Recovery Planning
Sections 11 and 12 of the FINRA cybersecurity checklist focus on what your firm does during and after a cybersecurity event. These sections are critical for demonstrating operational resilience to both FINRA and to clients, partners, and investors.
Section 11: Incident Response Plan
This section evaluates whether a firm has a written, tested incident response plan (IRP). Key items include:
Defined roles and responsibilities
Procedures for detecting, containing, and investigating incidents
Escalation and notification protocols
Communication plans for internal teams, regulators, and affected customers
FINRA expects companies to have procedures in place for when and how to report incidents. This may include filing suspicious activity reports (SARs), disclosing information to clients, or notifying law enforcement, depending on the nature of the incident.
Section 12: Recovery Planning
This section asks how a firm will restore systems, data, and operations after an incident. It connects directly to the business continuity plan (BCP) and includes:
Backup processes and frequency
System restoration procedures
Validation of recovered data
Post-incident reviews and corrective actions
Many smaller firms assume a vendor or IT provider handles recovery. But FINRA expects them to understand how recovery works, how long it takes, and who leads it. This includes testing backup systems and documenting lessons learned after an event.
Sections 11 and 12 round out the checklist with a focus on accountability and continuity. They help firms move from reactive to prepared.
Key Cybersecurity Requirements Behind the Checklist
The FINRA cybersecurity checklist is not just a list of helpful tips. It's based on actual rules and requirements that financial companies must follow. For the people responsible for making sure their company follows the rules, understanding where these requirements come from helps explain why the checklist is important and how it connects to other rules they need to follow.
In other words: This isn't optional advice—it's based on real regulations that companies can get in trouble for not following.
FINRA Rules (e.g., Rule 4370)
FINRA rules cover a wide range of regulatory responsibilities, and while there is no dedicated rule focused exclusively on cybersecurity, several of these rules have clear implications for cyber risk management. Key among them is FINRA Rule 4370 (Business Continuity Plans and Emergency Contact Information).
This rule requires firms to maintain written procedures that address operational disruptions, including those caused by cyberattacks. Sections 11 and 12 of the checklist directly relate to this expectation, particularly in terms of recovery planning and response roles.
Other relevant obligations may fall under Rule 3110 (Supervision), which covers oversight of systems and processes that could include cybersecurity controls.
SEC Regulation S-P and S-ID
Firms registered with the SEC must also comply with:
Regulation S-P: Requires firms to adopt written policies and procedures to safeguard customer information.
Regulation S-ID: Covers identity theft red flags and mandates a written program for detecting and responding to suspicious activity involving client accounts.
Both regulations inform many of the checklist's questions around data classification, access control, and incident handling. In 2024, the SEC also adopted amendments requiring customer breach notifications under Regulation S-P, raising the bar on response expectations.
To learn more about the requirements, read our SEC cybersecurity guide.
NIST Framework Alignment
The checklist follows the structure of the NIST Cybersecurity Framework. This framework is a widely accepted standard in both the private and public sectors. The five core areas (Identify, Protect, Detect, Respond, Recover) align directly with the checklist’s sections.
By following the checklist, firms are informally aligning with a recognized risk management framework without the need to customize or adopt it from scratch. For resource-constrained fintechs, this offers a practical and regulator-recognized foundation.
Common Mistakes and Misconceptions Compliance Teams Should Avoid
The FINRA cybersecurity checklist offers a practical framework, but its effectiveness depends on how thoroughly it is applied. In many firms, gaps in execution, like incomplete data mapping or unclear responsibilities, can weaken its impact.
Here are four common issues that reduce the checklist’s value and increase regulatory exposure:
1. Treating the Checklist as Optional:
Because the checklist is not mandatory, some firms treat it as a best-effort or side project. However, FINRA has made it clear that cybersecurity is a critical part of supervisory obligations. The checklist reflects what regulators look for during exams and audits.
Treating it casually, filling in generic answers, or rushing through it means missing its real purpose: identifying meaningful gaps before they lead to incidents or regulatory issues.
2. Outsourcing Without Oversight:
Many firms assume that because they have hired a cloud provider, IT consultant, or managed service vendor, cybersecurity is “taken care of.”
However, FINRA holds the firm, not the vendor, responsible for oversight. If your provider manages backups or detection systems, that should be documented and reviewed regularly. And someone at your firm should still understand what is in place and how it works.
3. Incomplete Data Visibility:
Firms often overlook where sensitive data actually lives or who has access to it. Files exported to personal devices, staff using unsecured file-sharing tools, or third-party integrations with broad permissions can all fly under the radar.
The first few sections of the checklist are designed to surface these risks, but only if the inventory and mapping are taken seriously. This is not just about systems, but also about workflows and habits.
4. Skipping Documentation:
Not every risk can be eliminated. Regulators understand that. However, they expect firms to make informed decisions, document them, and revisit these decisions regularly.
If your firm decides not to encrypt a particular system or to delay an update due to budget or timing, that decision should be recorded with clear reasoning. The checklist can help flag those points and serve as a place to track progress or revisit tradeoffs later.
See also:
Tips for Small Firms and Fast-Moving Fintechs
For small broker-dealers and fintechs, time and budget constraints are constant. The FINRA cybersecurity checklist may seem too detailed or time-consuming at first, but with an adequate approach, it can serve as a practical tool for building a lean and effective cybersecurity program.
To get the most out of the FINRA cybersecurity checklist:
Prioritize Controls Based on Risk
Begin with identifying which gaps pose the most risk to client data or operational continuity, and focus on controls that:
Prevent credential theft or unauthorized access
Involve third-party vendors with deep system access
Expose client information if misconfigured
From there, you can work your way down the list, based on impact and feasibility. The checklist helps you organize this in a structured way.
Consider Outsourcing Cybersecurity Tasks
Many fintech companies rely on vendors or managed security providers to run their core infrastructure. When working with external providers, clearly define responsibilities and make sure that all parties understand them.
Document which cybersecurity responsibilities are handled externally and which ones remain in-house. FINRA expects firms to maintain oversight, even when tasks are delegated. This is exactly how companies end up with a disconnect between IT execution and regulatory expectations. Working with a specialized outsourced compliance team can help close those gaps.
Strengthen your cybersecurity compliance program with InnReg’s oversight services for fintech firms →
Use the Checklist to Train New Team Members
The FINRA cybersecurity checklist can also be used as a valuable onboarding resource.
New employees in compliance, operations, or IT can use the checklist to quickly understand how the firm manages sensitive data, which systems are considered high-risk, and where responsibilities lie across teams. It provides a structured approach to learning about the controls in place, the areas under review, and the rationale behind specific cybersecurity decisions.
Examining past versions of the checklist also provides new team members with insight into how the firm’s cybersecurity program has evolved. It highlights what has been addressed, what is still in progress, and where the priorities are shifting, helping them contribute faster and with better context.
How to Revisit and Revise Over Time
Once completed, the checklist should be built into your compliance calendar and reviewed at least annually, or whenever your business model, tech stack, or vendor list changes. Minor adjustments, done consistently, are easier than significant fixes under regulatory pressure.
What Happens If You Ignore the FINRA Cybersecurity Checklist?
The FINRA cybersecurity checklist is voluntary. However, ignoring it can expose firms to regulatory scrutiny and enforcement, as well as damage customer trust.
FINRA examiners are increasingly asking firms how they manage cybersecurity risks. If a firm cannot demonstrate that it has identified key risks, documented controls, or planned for response and recovery, it may face heightened scrutiny. Even if no incident occurs, being unprepared during an exam can affect credibility with regulators and slow down approvals for new products or licenses.
From a business standpoint, weak cybersecurity controls can erode client trust quickly, especially in fintech, where the expectation is real-time access to sensitive data and services. Operationally, firms that lack proper detection or recovery plans risk prolonged downtime in the event of an attack. For startups and small broker-dealers, that could mean reputational damage, customer churn, or missed funding opportunities.
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The FINRA cybersecurity checklist is more than an internal audit tool. It shows you what regulators are looking for and highlights the real security risks any financial company faces when handling sensitive information.
For fintech companies and smaller broker-dealers, it offers a clear, step-by-step way to build security practices that match what the industry expects. When you use it properly, it helps you spot weak points, keep better records, and make sure your security measures meet regulatory standards.
Whether you handle compliance yourself or work with external partners, the checklist gives you a roadmap for getting continuous improvement. It won't solve every regulatory requirement by itself, but it helps you see where you stand, so you can make better choices and avoid unpleasant surprises during regulatory exams, investor reviews, or during a security incident.
How Can InnReg Help?
InnReg is a global regulatory compliance and operations consulting team serving financial services companies since 2013.
We are especially effective at launching and scaling fintechs with innovative compliance strategies and delivering cost-effective managed services, assisted by proprietary regtech solutions.
If you need help with compliance, reach out to our regulatory experts today:
Published on Sep 4, 2025
Last updated on Sep 4, 2025
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