The security of financial information has always been a cause for concern. The data that the financial industry collects grows vastly every year. The financial sector has made significant advancements in terms of digital integrations. So much so that customers do not need to go to banks to transact physically. These advancements carry with them some risks. With time the risks keep on evolving. The regulatory bodies that keep an eye on the financial data always add new guidelines to avoid emerging risks.
The preferred form of storage for financial data is in the cloud. Cloud storage requires a high level of cybersecurity and continuous monitoring to ensure the information is secure. Maintaining a good cybersecurity posture is vital to keeping malicious parties at bay. Malicious parties always try to breach the cloud infrastructure to steal personal information, authentication, or company secrets.
What are the Standards and Regulations Governing Financial Services?
Over time, several standards and regulations have been established to assist companies to stay cyber secure (NIST, PCI DSS, ISO 27001/27002, CIS etc.,). Compliance to the regulations and standards ensures that a company is up to date on cybersecurity measures. The penalties of non-compliance and breaches offer enough incentive for financial institutions to comply with the necessary regulations. Here are some of the rules governing financial services, especially in relation to their marketing of services.
1. California Consumer Protection Act (CCPA)
The consumer act is mostly for profit-making entities with high revenues, transactions, and earns over 50% of revenue from selling personal information. If a firm that meets the requirements has a controlling interest in a subsidiary, the act also applies to the subsidiary. The statute is only applicable to businesses, services, employees, customers of goods, and services living in California.
The act tends to work mostly on permanent residents more than temporary residents of California.
2. General Data Protection Regulation (GDPR)
The GDPR has a broad privacy law that covers a wide range of EU. The regulation includes EU citizens, data controllers, data processors, and those who encounter the financial services outside of the EU. GDPR seeks to protect identifiable data from malicious parties. The regulation stipulates that financial services should provide an opt-out option for clients who want to withdraw their consent on transacting. Every user of the financial services should be aware of the opportunity.
Also, financial services should have a system that allows users to request the deletion of their personal information from the system. As a security measure, it minimizes the risk of information theft relating to dormant, unnoticeable users.
How do Emergent Threats Affect Financial Services?
A report released in 2019 by Verizon Data with regards to the impacts of breaches to financial services uncovered some interesting facts. The investigations show the trends of cybersecurity threats. The financial services may have new sources of breaches to consider as follows;
1. The Seriousness of Violations
The financial services industry is the top fourth industry that is a target of for malicious parties. The kind of information held by financial services is a beacon for malicious parties seeking to steal it.
2. Top Three Target Categories
There are three categories that threat actors can compromise more quickly than others. They include web applications, miscellaneous errors, and privilege misuse. Web applications require high cybersecurity precautions to prevent a breach. Errors need correction promptly after discovery. All authorization to parties who interact with privilege information needs continuous monitoring. Internal breaches are fast becoming the norm in the financial service industry.
3. Main Sources of Threats
The Verizon report shows that 72% of breaches originate from external parties. What is shocking is that 36% of the breaches originate from within the companies. Meaning more authorized users face the temptation of tampering with confidential information. Only 2% of the violations required partnering. Out of all compromises, 10% involved multiple parties. Meaning collaborations are being made to breach different security features in financial services.
4. Type of Data at Risk
The kind of data that malicious parties want to steal can give the financial service industry hints on areas that require additional security measures. 43% of data breaches target personal data. 38% of data breaches target credentials, and the other 38% involves private information. Getting company credentials and learning company secrets makes the financial service industry more vulnerable to cyber-attacks.
Financial services institutions must ensure all the data they collect is secure. Implementing regulatory guidelines can significantly assist in preventing security breaches. Regular audits and continuous monitoring go a long way to provide identification of threats in the early stages. Reviews also reveal the security controls that you need to update to keep financial information safe.
You can find tools and devices like preparing a risk management plan to assist you in maintaining compliance. This can help you conduct risk assessments, monitor data, document activities, and generate regular reports on the cybersecurity position of the organization.