Nearly 46% of financial institutions reported experiencing a data breach in just the last 24 months, with the average cost of a breach in finance reaching $6.08 million, 22% higher than the global average. 

SplitSecure’s banking focused identity and access management solution was built to create secure, compliant identity and access management with cryptographically-backed audit trails as a native output of the architecture.

Technology like this shifts compliance from periodic attestation to continuous, cryptographically verifiable control

In this blog we want to go further and explain why, when it comes to privileged access management for financial institutions, compliance with ‘least privilege’ or ‘separation of duties’ requirements from regulators is best done through architecture instead of policy attestation. 

What Do Banking Regulators Actually Require for Identity and Access Management In 2026?

As of 2026, multiple frameworks create direct and indirect requirements for how banks must manage privileged identities and credentials. 

In the table below, we’ve summarized the core trends across major banking regulations.

Requirement	Regulation	What Identity Management In Banking Needs to Do
Separation of duties	DORA Article 9 / FFIEC / OCC	No single identity can complete a critical transaction alone. Privileged access requires multi-party approval.
Audit trails and logging	DORA Article 12 / SOX / NYDFS	Every credential access event must be logged, tamper-resistant, and independently reviewable.
Third-party risk management	DORA Article 28 / OCC / NYDFS / SEC S-P guidance	Critical access infrastructure should not be over-dependent on a single external vendor.
Least privilege access	FFIEC / NYDFS Part 500 / PCI DSS	Users should only access the credentials they need for their specific role.

The cross-cutting theme here is that banks in 2026 need to have two core capabilities:

1. Access to critical systems must enforce separation of duties. No single identity should be able to complete a high-impact action alone, and every credential retrieval must generate an auditable record.

2. Identity management banking solutions must not introduce third-party concentration risk. If your access management provider is breached, your credentials must remain secure.

Comparing “Traditional” Banking IAM Approaches 

What we call “traditional identity and access management in banking” is when banks build policies around an access management tool or system that relies on one of two models: on-premises PAM vaults or cloud-based SaaS IAM solutions.

Both can check boxes during an audit, but neither provides continuous, architectural assurance against breaches or future compliance drift.

On-Premises PAM Vaults Leave Smaller Banks With Too-High TOC 

On-premises privileged access management solutions store complete credentials in centralized vaults and create a high total cost of ownership (TOC) for smaller banks. 

They can technically enforce separation of duties through policy-based access controls, but the vault itself is a single point of failure. If the vault is compromised, every credential it stores is exposed. 

The major problem with vault-based access management solutions is that implementation projects regularly span months, and nearly one in two IT leaders describes PAM implementation complexity as a top challenge. 

For a mid-market bank that does not have a dedicated PAM engineering team, this is often where the conversation stalls.

Cloud-Based SaaS IAM Solutions Introduce Concentration Risk

Cloud-based identity and access management (IAM) solutions eliminate infrastructure overhead for banks but introduce a new kind of risk because credential retrieval depends on the vendor’s platform availability, and a breach of the vendor’s infrastructure can expose a bank’s secrets.

For the highest-sensitivity credentials, financial institutions need an approach that replaces checkboxes with cryptographic assurance. 

SplitSecure provides financial services identity and access management that is compliant by default. Learn More.

Banks Can Replace Checkbox Compliance with Cryptographic Assurance

The most efficient route to architectural compliance inside every bank is to focus on the “last secrets” protecting the entire system. Those last secrets are a liability.

A solution like SplitSecure can rapidly deploy to protect last secrets in a way that is architecturally enforced and happens as a technological default. Here’s how. 

Enforce team-based access control

SplitSecure splits a bank’s credentials across a group of devices called a team. For example, when an employee wants to log in to a sensitive account, they might be part of a team consisting of their iPhone, their laptop, and an Okta integration. 

When these entities collectively confirm that the access request complies with company policy, access is granted automatically and invisibly in the background.

No device in the team ever stores the credentials. Even if an attacker fully compromised the devices and user accounts of your IT admin, they could not extract the protected information. 

This is fundamentally different from vault-based PAM solutions, where complete secrets sit behind access controls, or cloud-based IAM solutions, where the vendor stores your credentials on their infrastructure.

Separate Duties Cryptographically 

With SplitSecure, reconstructing a secret requires a ‘threshold’ of team members to collaborate from their individual devices. This is not a policy that can be bypassed through social engineering, emergency exceptions, or a compromised admin account. It is a mathematical property of how SplitSecure works.

According to Cyber Security Times, for identity access management in banking, this means that the separation of duties requirement in DORA Article 9, FFIEC guidance, and NYDFS Part 500 is met by the architecture itself, continuously, not just at the moment of audit.

Generate Continuous Compliance Proof

With policy-based IAM, you are compliant when the policies are correctly configured, and no one has overridden them. With SplitSecure, you are compliant all the time, because the controls cannot be overridden. 

Every secret reconstruction generates an audit record automatically because the distributed architecture requires coordination across devices. You cannot access a credential without creating an audit trail. 

This makes audits less onerous. Instead of gathering evidence that policies were followed, your compliance team can point to the architecture itself. The system produces compliance proof as a default output, not as a manual report assembled before an examiner’s visit.

Enforce Policy at the Action Level

In SplitSecure, the team “sees” how a secret will be used before deciding whether to grant an access request. This means Risk Managers and CROs can write policies not just for when secrets may be accessed, but specifically how they may be used. 

Depending on your needs, you can add requirements for integrations with multiple tools, MFA, or human approval, covering everything from routine morning logins to highly sensitive actions that require the approval of multiple humans.

Is Your Banking IAM Architecture-First or Checklist-First?

Banks and financial institutions need to move from checkbox compliance to cryptographic assurance for separation of duties, audit trails, and third-party risk management.

Tools like SplitSecure give banks regulatory-compliant access management built into your bank’s processes rather than built on top of them.