Financial Crime World

Cybersecurity Regulations in the Financial Industry

The financial industry is heavily regulated, with numerous laws and guidelines aimed at protecting sensitive customer data and preventing cyber threats. Compliance with these regulations is crucial for maintaining trust, mitigating risk, and ensuring the long-term success of any financial institution.

Key Regulations and Requirements

1. Consumer Privacy Act (CCPA)

The CCPA grants California consumers specific rights regarding their personal information:

  • The right to know what data is collected
  • The right to delete personal information on file
  • The right to opt-out of the sale of personal information

2. General Data Protection Regulation (GDPR)

GDPR provides individuals with greater protection and rights regarding their data, setting a framework for seven key principles:

  • Lawfulness
  • Fairness and transparency
  • Purpose limitation
  • Data minimization
  • Accuracy
  • Storage limitation
  • Integrity and confidentiality (security)
  • Accountability

Financial Regulations and Compliance Requirements

Encryption

Financial institutions must protect cardholder data with encryption in storage and transit over public or private networks under PCI DSS guidelines.

Firewalls and Web Gateways

Institutions must install and maintain a firewall, restrict access to payment systems, and deny unauthorized traffic.

Intrusion Detection

Institutions should use an intrusion detection system (IDS) to detect and/or prevent intrusions into the network under PCI DSS requirement 11.4.

Required Policies and Processes

  • Establishing and upholding security policies for incident reporting and response
  • Providing annual security awareness training to staff who process and/or store GLBA data
  • Timely patching for security updates

Vendor Management

Financial institutions must conduct robust due diligence when onboarding third parties, including ongoing monitoring of the relationship to uncover potential weaknesses in a third party’s IT security program.

Centralizing Compliance Management

Many financial institutions enlist third-party teams of security operations experts to manage compliance and optimize threat detection and response. Creating and staffing a SOC from scratch can be difficult, time-consuming, and expensive.