Four Steps to Financial Data Security Compliance

Thanks to the increasingly outsized role financial data plays in the world today, a fast-evolving ecosystem of laws and regulations have taken root in the financial industry. This dynamic legal environment has seen many financial services organizations find themselves under immense pressure to continuously modify their technology and business processes in order to meet compliance requirements (see how to handle data compliance whitepaper).

Yet, the cost of non-compliance especially in the heavily regulated space that is financial services is too high to be worth disregarding. For multinational corporations with an army of lawyers at their beck and call, continued compliance is a walk in the park. Small and medium-sized entities enjoy no such luxury.

Fortunately, financial data security compliance doesn’t have to be out of reach. By following these 4 steps, you will greatly increase your chances of staying in the good books of regulators.

1.  Securing Data Transmitted Over the Company’s Network

Given the sensitive and critical nature of financial transactions, financial service organizations will sign up for high-speed WAN solutions from telecom carriers and other internet service providers. While it is a dedicated, private and secure connection, it, however, fails to guarantee data security or integrity.

Therefore, the businesses must take the initiative themselves and apply their own security solutions to such data in motion. High-speed encryption is the best way to secure network traffic in order to satisfy regulatory requirements such as PCI DSS and HIPAA. When choosing a solution, look for ease of integration, efficient use of bandwidth, ease of administration and an exhaustive audit trail.

2. Protecting Data on Servers, PCs, Laptops, Smartphones, and Portable Devices

Smartphones have taken the world by storm over the last decade. In this context, it’s only natural that portable and mobile computing has become so vital in growing business efficiency and productivity. Nevertheless, portability has introduced or exacerbated data security risks.

Portable devices are more vulnerable to theft or loss. The resulting data loss or breach may be in violation of industry regulations and could trigger penalties. Full disk encryption is your safest bet when it comes to protecting data at rest. It’s reliable in the sense that even where a hacker does penetrate the other layers of defense, sophisticated encryption algorithms ensure data remains secure.

When it comes to encryption solutions, choose those that have the highest security standards such as CC EAL2/EAL4 and FIPS 140-2.

3. Access Control

Encrypting data in motion and at rest is crucial but certainly not sufficient. Often, data security incidents occur not because sensitive information wasn’t encrypted but because a valid user account was used to access the data but without proper authorization. Ultimately, every system will have user accounts and these are assigned based on the role the individual plays in the organization. Users will be authenticated through a unique ID accompanied by a password, key, biometric (such as a retinal scan or fingerprint) or digital certificate.

These are considered the bare minimum for an authentication system. Businesses can go one step further by implementing multi-factor authentication where the user provides their ID, password and at least one more credential such as a smart card or a randomly generated security token sent to their phone by SMS. Overall, the goal of authentication is to ensure data is easily and immediately available for authorized persons but inaccessible to those who cannot be conclusively identified.

4. Protect Cryptographic Keys

Encryption is so central to data security that protecting the cryptographic keys used in the encryption and decryption of confidential data is fundamental. If a key falls in the wrong hands, your entire security infrastructure (irrespective of how sophisticated or costly) will be instantly rendered pointless.

Encryption key protection must, therefore, be seen as a key component of any compliance program. A proven way to keep your cryptographic keys safe is through hardware security modules (HSMs). These are special devices built to securely store, generate and protect encryption keys. HSMs also provide a detailed audit trail that’s useful for reporting and tracking.

If you want to get financial data security compliance right, these four steps are the most likely to get you there.


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