Financial Institutions Face Increasing Pressure to Protect Customer Data

In the wake of numerous high-profile data breaches, financial institutions are under intense scrutiny to ensure the security and confidentiality of their customers’ personal information. The stakes have never been higher, as regulators impose stricter penalties for non-compliance with regulations such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR).

CCPA: A Game-Changer for California Consumers

The CCPA gives California consumers unprecedented control over their personal data, granting them the right to:

Know what information is being collected, used, shared, and sold
Delete personal information on file
Opt-out of data sales
Demand corrections to inaccurate data

The GDPR sets a global standard for data protection, requiring organizations to implement robust security measures to protect individuals’ personal data. The regulation is built around seven key principles:

Lawfulness
Fairness and transparency
Purpose limitation
Data minimization
Accuracy
Storage limitation
Integrity and confidentiality

Financial Regulations and Compliance Requirements

To ensure the security of customer data, financial institutions must comply with a range of regulations, including:

PCI DSS: requires the use of encryption to protect cardholder data
Firewalls and web gateways: implement firewalls and web gateways to prevent unauthorized access
Intrusion detection systems (IDS): detect and prevent intrusions into the network

Encryption: A Critical Layer of Security

Encryption is a critical layer of security that can provide an additional layer of protection against cyber attacks. PCI DSS prohibits the storage of full contents of any track from the card’s magnetic stripe or chip, and all cardholder data and personally identifiable information must be protected with encryption in both storage and transit.

Firewalls and Web Gateways: Essential Components

Financial institutions must install and maintain firewalls under PCI DSS guidelines, which includes:

Changing default passwords
Restricting payment system access to only what is necessary
Denying unauthorized traffic
Auditors will also check that all connections are necessary for business purposes and that insecure connections are supplemented with additional security controls.

Intrusion Detection: A Key Component of Cybersecurity

Financial institutions must use IDS to detect and prevent intrusions into the network, in accordance with PCI DSS requirement 11.4. This includes:

Monitoring network traffic at the perimeter of the cardholder data privacy environment
Ensuring timely notification of unauthorized access

Logging and Data Collection: Critical for Incident Response

Under GLBA, all security event information must be logged and reviewed, while PCI DSS requires continuous tracking and monitoring of access to network resources and payment data. This includes:

Using logs to facilitate tracking and forensic analysis in the event of a breach
Conducting annual security awareness training for staff who process and store GLBA data

Required Policies and Processes: Key to Compliance

Financial institutions must establish and uphold security policies for:

Incident reporting and response
Conducting annual security awareness training for staff who process and store GLBA data
Timely patching for security updates
Using up-to-date security controls like firewalls

Vendor Management: A Critical Component

Financial institutions must conduct robust due diligence when onboarding third-party vendors, including:

Ongoing monitoring of the relationship to ensure compliance with regulations and standards

Centralizing Compliance Management: The Key to Success

In today’s complex regulatory landscape, financial institutions can no longer afford to operate in isolation. Instead, they must centralize compliance management through a security operations platform that integrates threat detection and response capabilities.

Take Action: Download the Financial Industry Cybersecurity Checklist

To learn more about the critical steps your organization can take to enhance security and comply with regulations, download our comprehensive checklist today.