3 Data Protection Tips for Banking and Financial Services

Banks, credit unions, and other financial services companies collect and process huge amounts of sensitive data on a daily basis, making them prime targets for cybersecurity risks and data loss from cyber criminals; highlighting the importance of data privacy. As a result, those organizations are some of the most heavily regulated when it comes to data protection, with both international standards and national laws legislating the way financial information is collected, stored, and processed.

In the US, laws like the Sarbanes-Oxley Act (SOX) and the Gramm-Leach-Bliley Act (GLBA) were adopted before the widespread use of digital records to boost accountability and transparency in the collection and disclosure of customers’ personal financial information. In more recent years, the EU has revolutionized data protection through its General Data Protection Regulation (GDPR), which made organizations, including financial institutions, directly accountable for the security of the sensitive and personal data they collect. Internationally, all financial services that handle payment information from branded credit cards from major card schemes must comply with the Payment Card Industry Data Security Standard (PCI-DSS).

Banking and financial services face a tough challenge when it comes to data protection. They are not only on the front line of cyber threats and cyberattacks but are also the most likely to incur the wrath of data protection agencies the world over in the case of breaches, risking both high fines and a loss of reputation that can severely impact their bottom lines.

Many banking and financial services therefore invest heavily in extensive data protection frameworks, often collaborating with expert data loss prevention (DLP) solution providers to implement policies and technology solutions that help keep sensitive information secure. While these can be effective, a lot of time and energy is spent on securing data against external threats while ignoring obvious internal vulnerabilities linked to business operations. Here are our top tips on how banking and financial services can mitigate those vulnerabilities:

Always consider data on the move

Whether it’s employees working remotely or third-party vendors that provide essential support to financial services organizations, nowadays sensitive data is often on the move. This is a frequent blind spot in data security strategies with cybersecurity frameworks focusing on securing data on the company network while overlooking what happens once that data has left office premises.

It is therefore important that organizations implement data protection solutions that work even if a computer is no longer connected to the company network. This usually means that they need to be applied at the endpoint level rather than at the network level.

When it comes to third parties, companies must ensure that their vendors have adequate cybersecurity policies in place that will offer the same level of data protection for sensitive data they themselves do. This can be done by making data protection frameworks a mandatory requirement for all vendors.

Don’t ignore internal threats

With the biggest threat to sensitive data being considered malicious outsiders, insiders can often be overlooked as a source of risk although they are one of the major causes for data breaches. Whether it’s falling for phishing attacks, sending sensitive data via insecure channels, or unauthorized access, employees are at the heart of some of the world’s most notorious data breaches, including the now-infamous Equifax data breach that exposed the records of nearly 146 million Americans.

An efficient way of mitigating the risk of internal threats, particularly in protecting bank account information and other customer data, is through strong authentication measures and the use of DLP tools. It is important for companies to raise awareness about the dangers of data leaks and their financial and reputational consequences for the company. They also need to educate their employees about the best data protection practices and how they can stay clear of social engineering tactics.

DLP solutions can be used to leverage training efforts by applying effective data protection policies, and ensuring sensitive data is not transferred through insecure channels or to unwanted third parties.

Always have a response plan

Many cybersecurity frameworks seek to protect data to make sure data breaches never happen. Applying the Center for Internet Security (CIS) 20 Critical Security Controls, a ground-breaking set of globally recognized best practice guidelines for securing IT systems and data, for example, can prevent as much as 97% of all data breaches. However, that still leaves a 3% chance.

When it comes to cybersecurity, unfortunately, there is no 100% foolproof strategy for ensuring data breaches do not happen. Which is why companies must always be prepared for the eventuality, no matter how small, that a data breach might happen to them.

Under most of the new data protection laws, organizations also have an obligation to notify data protection agencies of any major data breaches, sometimes, such as the case of the GDPR, in as little as 72 hours. They also have to inform all those affected by the breach that their data has been compromised.

It is therefore essential for companies to put together an incident response plan and test it so that, in the event of a data breach, they can react efficiently, have notification procedures in place, and can quickly recover in its aftermath.

The Role of DLP Solutions in Financial Data Protection

In the financial services sector, safeguarding sensitive data is not just a best practice but a necessity, given the magnitude of cyber threats and regulatory demands. DLP solutions like Endpoint Protector by CoSoSys are indispensable, serving as a robust shield against data breaches and unauthorized access. These solutions are adept at identifying, monitoring, and protecting sensitive financial information, including customer information, across various platforms. By implementing DLP tools, financial institutions can effectively monitor and control the transfer of sensitive data, ensuring it remains secure both in transit and at rest. Moreover, DLP solutions are equipped with advanced data protection techniques like encryption and access controls, which are crucial in preventing data leaks and unauthorized access.

A significant aspect of DLP solutions in the financial arena is their contribution to regulatory compliance. Financial institutions are bound by various regulations like GDPR, PCI DSS, and SOX, which demand stringent data security measures. DLP tools not only ensure compliance with these regulations but also provide comprehensive reports and audit trails, critical for regulatory assessments and investigations. Additionally, they play a vital role in internal risk management by mitigating insider threats. By integrating DLP solutions with employee training programs, financial institutions can enforce data security policies more effectively, thereby reducing the risk of data breaches from within.

DLP solutions are not just tools but strategic assets in the financial services industry, providing a multi-layered defense mechanism against both external and internal data security threats. Their role in ensuring compliance, managing risks, and safeguarding sensitive financial information is invaluable, making them a fundamental component of any robust data security strategy in today’s digitally driven financial landscape.