Financial Institutions Face Heightened Scrutiny Over Systems and Customer Data

A recent surge in cyber attacks has prompted regulators to tighten their grip on financial institutions’ data security measures, leaving banks and other organizations scrambling to ensure compliance.

Regulatory Environment

The California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) are two key regulations that have raised the bar for data protection. The CCPA grants Californians more control over their personal information, including the right to know what data is being collected, deleted, or sold. Meanwhile, the GDPR has been hailed as the strongest data protection law in the world, with seven key principles aimed at ensuring individual rights and freedoms.

In addition to these regulations, financial institutions must also comply with industry-specific guidelines, such as PCI DSS (Payment Card Industry Data Security Standard) and GLBA (Gramm-Leach-Bliley Act).

Encryption: The First Line of Defense

One critical aspect of data security is encryption. Financial institutions are required to encrypt cardholder data both in storage and in transit over public or private networks. This ensures that even if an attacker gains access to the data, it will be unreadable without the decryption key.

Firewalls and Web Gateways: The Next Layer of Defense

A robust firewall is another essential component of a financial institution’s security strategy. Under PCI DSS guidelines, institutions must install and maintain firewalls to prevent unauthorized traffic and restrict payment system access to only what is necessary.

Intrusion Detection: Identifying and Responding to Threats

An intrusion detection system (IDS) is also crucial in detecting and preventing intrusions into the network. This helps financial institutions respond quickly to potential threats and mitigate damage.

Logging and Data Collection: Tracking and Analyzing Network Activity

Log data is a critical component of incident response and reporting. Financial institutions must log all security event information and review it regularly to identify potential threats.

Required Policies and Processes: Incident Reporting and Response

In addition to technical controls, financial institutions must also establish and uphold policies for incident reporting and response. This includes annual security awareness training for staff who process or store sensitive data.

Vendor Management: The Importance of Due Diligence

When engaging third-party vendors, financial institutions must conduct robust due diligence to ensure their IT security programs are up to par. Ongoing monitoring is also critical to prevent potential weaknesses from being exploited.

Centralizing Compliance Management: A Key to Efficiency and Effectiveness

In today’s complex regulatory landscape, financial institutions need a centralized approach to compliance management. By leveraging third-party security operations experts or platforms, institutions can optimize threat detection and response while reducing costs and improving efficiency.

Download the Financial Industry Cybersecurity Checklist

For more information on how to enhance security at your organization, download the Financial Industry Cybersecurity Checklist.