Navigating the Needs of Critical Data Protection for Financial Institutions in today’s Data-Centric Landscape
Robust data protection is no longer a concern to be left exclusively for companies and businesses to abide by. Financial institutions are becoming increasingly reliant on online transactions and activities, which makes them susceptible to vulnerable situations like data breaches and leaks that could lead to severe damage. These mishaps could cause irrevocable damage to the institution’s reputation and standing.
An example here would be the Capital One Data Breach, in March 2019, which affected credit card records and social security numbers of approximately 100 million people in America and over 60 million in Canada. Another instance would be Experian in August of 2020 losing data that cost US organizations an average of $9.4 million. Not being aware of the risks of losing valuable information can tarnish the reputation of a company in an almost irreversible way. This makes it paramount for financial institutions to take rigorous measures to secure the data they are storing and regularly update those measures to suit the ever-evolving nature of threats to data privacy and security.
Today’s needs for apt data security require vigorous models that are built to adapt to the ever-present need for change and evolution. Many governments expect such extensive security measures to be taken by financial institutions by default and administer hefty fines to those who fail to comply with any regulations. However, there are a few specific ways financial institutions can ensure they are taking appropriate measures to cater to the data protection of their consumers.
Compliance Via Regulation: The GDPR in the European Union and the Gramm-Leach-Bliley Act in the US have firm regulations when it comes to compliance with certain standard policies to be adhered to by financial institutions. By complying with these laws, financial institutions ensure certain protection from data breaches via malicious sources. These regulations have definitive measures that seek to protect and empower Financial Institutions with some protection and planning to avoid data breaches. To ensure adherence, failure to comply with these regulations can lead to weighty fines and severe legal repercussions.
Understanding and Evaluating Risks: Financial Institutions should actively seek to find out the loopholes in their processes to safeguard sensitive customer information. There should be proper risk assessment programs that help them analyze their shortcomings and cater to those via thorough evaluation.
Awareness Among Employees: Financial Institutions should conduct proper training and awareness programs to ensure their employees are aware of basic cybersecurity protocols to follow in case of a data breach or mishap. Employees should be made aware of some patterns of scams including phishing scams, which can easily be avoidable via training and awareness. Proper go-to strategies should be in place in case there is a need, and regular training programs should help solidify these strategies.
Monitoring and Regulating Access: Employee access to sensitive information should be limited to a few privileged employees. A limited number of employees with access would ensure accountability and responsibility in terms of handling the data. Implementation of strict rules regarding access could also introduce a seriousness in dealing with sensitive information. This would significantly reduce careless mistakes and errors.
Data Encryption: This is a pillar of protection that could safeguard compromised data in case of a data breach. Ensuring encryption can help protect the data while it is at risk, and prevent any loss while it is in the process of being retrieved. Encryption can also ensure it is safe while it is in transit, protecting it against unauthorized access.
Robust Network Security: Financial institutions should have sturdy security systems in place that are regularly updated to suit the changing needs of data protection in today’s data-centric landscape. Firewalls, intrusion detection/breach detection systems, and endpoint protection should be in place to intercept unauthorized access and potential data breaches.
Data Mapping: Mapping the flow of data will allow financial institutions to locate any weak links, as well as understand the flow of sensitive information within the organization itself. This would help to trace the source or flaw within the organization–this identification could also help financial institutions rectify their network of information sharing within the company in case it is needed.
Incident Response Protocol: There should be proper protocols and strategies in place in case of a data breach, and employees and members of the organization should be aware of these. The training and awareness programs should include a demo of these go-to strategies to ensure these are practiced and easy to follow in case of an emergency.
Maintaining Password Hygiene: This is another segment that could be included in awareness and training programs for employees, but this basic habit could help safeguard data against any brute-force attacks.
Strict Monitoring of Third-Party Vendors: While it is an established practice to hire third-party vendors to sort out a multitude of issues, threats to data protection are a problem that the institution will have to bear the consequences of. This is why it is essential to analyze and monitor any underlying risks or shortcomings of the vendor involved.
The vitality of data protection will only increase in today’s ever-growing data-centric climate. Financial institutions will need to adhere to the latest cybersecurity practices to keep up and ensure they (or their consumers) are not put at risk.