How to Secure Company Financial Data
What Is Financial Data Security?
Financial data security encompasses the technology, policies, processes, and physical safeguards that are put in place to protect sensitive financial data. Financial data security includes protections for hardware, software, networks, storage devices, and user devices, as well as authentication, access, and administrative controls. Financial data security aims to protect information throughout its lifecycle from unauthorized access, corruption, and theft.
Financial data security protects information related to financial accounts and transactions, such as customer account numbers, credit card numbers, transaction data, sales data, purchase history, credit information, and credit rating data. It also includes a company’s assets and liabilities, such as real estate, equipment, furniture, computers, intellectual property, patents, and debt owed. In addition, financial data security ensures customer trust and compliance with legal requirements.
What Are the Three Types of Data Security?
Financial data security protections fall under the three core elements of general data security—confidentiality, integrity, and availability. These three elements are referred to as the CIA Triad and serve as a proven model for financial data security. The functions of each element of the CIA Triad are as follows.
Authorized users can only access data based on their assigned privileges and is protected against accidental or malicious unauthorized access.
All data that is stored or transferred must remain reliable, accurate, and not subject to unauthorized changes.
Data needs to be consistently, readily, and securely accessible to authorized users.
There are many options to meet the requirements for financial data security. Following are several of the most widely used forms of financial data security.
- Data erasure
This is the process of overwriting and deleting data so it cannot be accessed. Data erasure is permanent and irreversible.
- Data masking
Data masking can hide information by obscuring and replacing specific letters or numbers. Once the information has been through a data masking process, it can only be decoded or decrypted by authorized users.
- Data resiliency
Financial data security requires that information be recoverable in the event of theft, disaster, or accidental damage or deletion.
Data encryption provides financial data security by using algorithms to scramble data and render it unreadable. Only authorized and authenticated users can access the data using decryption keys.
How Do You Secure Financial Data?
Following are financial data security solutions that align with best practices that direct the protection of sensitive banking and financial information. The type or blend of solutions used for financial data security will differ according to the size and type of organization.
- Anomaly detection
- Anti-malware software
- Application security
- Data backups
- Data governance
- Data loss protection (DLP)
- Data management
- Data security and privacy frameworks
- Differentiation between personal data and sensitive personal data
- Email security
- Encryption for data at rest and in motion
- Endpoint threat detection and response (ETDR)
- Identity and access management (IAM)
- Incident response plans (IRP)
- Intrusion prevention systems (IPS)
- Network segmentation
- Periodic risk assessments
- Role-based access controls (RBAC)
- Security awareness training
- Security information and event management (SIEM)
- Strong passwords
- Third-party risk management
- User activity monitoring
- Virtual private networks (VPN)
- Web security
- Wireless security
Are the Financial Data Security Laws?
Yes, there are a number of laws that dictate financial data security requirements. Failure to comply with financial data security rules can result in stiff fines and other stringent penalties. The following are several of the key laws that regulate financial data security.
Financial Industry Regulatory Authority (FINRA)
FINRA (the Financial Industry Regulatory Authority) has a number of rules for the financial industry detailing requirements for SEC members related to the information they need to collect, maintain, and protect. FINRA regulations ensure that regulators and investors have fast and secure access to critical information and protect investors’ and stakeholders’ information.
Gramm-Leach-Bliley Act (GLBA)
The Gramm-Leach-Bliley Act, referred to as GLBA, requires a financial institution to disclose the policies and practices it has in place to protect the confidentiality, security, and integrity of nonpublic personal information about consumers, even those who are not customers.
Payment Card Industry Data Security Standard (PCI-DSS)
Payment Card Industry Data Security Standard (PCI DSS) sets forth financial data security standards designed to ensure that any organization that accepts, processes, stores, or transmits credit card information maintains a secure environment. There are 12 requirements to maintain PCI-DSS compliance.
1. Assign a unique ID to each person with computer access.
2. Develop and maintain secure systems and applications.
3. Do not use vendor-supplied defaults for system passwords and other security parameters.
4. Encrypt transmission of cardholder data across open, public networks.
5. Install and maintain a firewall configuration to protect cardholder data.
6. Maintain a policy that addresses information security for all personnel.
7. Protect stored cardholder data.
8. Regularly test security systems and processes.
9. Restrict access to cardholder data by business need to know.
10. Restrict physical access to cardholder data.
11. Track and monitor all access to network resources and cardholder data.
12. Use and regularly update anti-virus software or programs.
Sarbanes-Oxley Act (SOX)
The Sarbanes-Oxley Act, referred to as SOX, is a law aimed at improving the quality and reliability of reporting by companies participating in the public capital market. Part of SOX regulates data storage, both on-premises and with cloud providers. SOX also mandates that data must be encrypted with a 256-bit AES key, regardless of content.
Securities and Exchange Commission (SEC) rules
The Securities and Exchange Commission, or SEC, has a number of rules governing financial data security. Among them is Rule 30 of SEC Regulation S-P, which requires companies to maintain written policies and procedures that detail the administrative, technical, and physical safeguards that should be in place to protect customer data. Another couple of SEC regulations that govern financial data security are Rules 31a-2 and 204-2. These rules set forth the criteria by which funds and advisers can maintain records electronically. In addition, they must establish and maintain procedures to:
- Ensure that electronic copies of non-electronic originals are complete, true, and legible.
- Limit access to the records to authorized personnel, the Commission, and, for funds, fund directors.
- Safeguard the records from loss, alteration, or destruction
Financial Data Security Critical as Threats Continue to Expand
Many financial data security solutions have proven track records addressing threats that target this industry. However, the rise of ransomware and other sophisticated threats pushes these solutions to their limits. As a result, financial data security can only be accomplished by continually integrating a rich mesh of tools that provide proactive detection and mitigation as well as ensure preparedness for swift and complete recovery in the event of a successful attack.
Egnyte has experts ready to answer your questions. For more than a decade, Egnyte has helped more than 16,000 customers with millions of customers worldwide.
Last Updated: 2nd October, 2023