7 components of a robust data privacy strategy for banking institutions

Learn why data privacy is a cornerstone of a modern bank’s business model and get a round-up of recommendations to keep sensitive financial information intact.

The ever-increasing rate of digital transformation across the enterprise world is a double-edged sword. On the one hand, it accelerates business processes for greater productivity, seamless interoperability, and better customer experiences. On the other hand, it makes the average organization’s attack surface grow exponentially, which poses challenges to curbing various threats, both external and those that occur on the inside of the corporate infrastructure.

Unsurprisingly, no industry is immune to cyberattacks these days. Here are some stats to give you the big picture. Healthcare, energy and utilities, manufacturing, and financial services have been targeted the most throughout 2023, says a recent threat intel report from BlackBerry.

While all these economic sectors are in the same boat, banking institutions – predictably enough – have found themselves in the eye of a perfect storm, because crooks follow the money and prioritize such entities as “juicy” targets. The threats range from file-encrypting ransomware attacks to data theft that potentially leads to reputational repercussions, regulatory issues, and financial losses when perpetrated by seasoned adversaries.

The following paragraphs will shed light on the pillars of data privacy in the banking industry. From where I stand, these insights can be a roadmap to avoid the above consequences and maintain business continuity in the current threat landscape.

How can banking institutions stand resilient against privacy issues?

Every financial organization is a complex entity with multiple elements exposed to compromise. These include databases of customer and employee records, cloud and on-premises data storage environments, corporate messaging services, third-party vendor interactions, and workplace set-ups (both in-office and remote).

In a structure as manifold as that, data privacy is a matter of protecting organizational assets from several different angles. The methods run the gamut from digital security strategies involving sophisticated systems such as data loss prevention (DLP) – to physical security through a privacy screen for office monitor that foils shoulder-surfing and other insider threat manifestations. Without further ado, here’s a summary of these recommendations.

1. Data encryption

Encryption makes data unintelligible, and hence useless to malicious actors who may intercept it. Banking institutions must implement end-to-end encryption for account numbers, Social Security numbers (SSNs), financial transactions, and other customer records, both in transit and at rest.

2. Secure data storage

Banking institutions should invest in robust and well-protected data centers with stringent physical and digital security measures at their core. These can include access controls, surveillance, intrusion detection systems, and firewalls to prevent unauthorized access or breaches. Enforcing concise data retention policies isn’t only a good way to instill confidence and build trust with clients and partners, but it’s also an inalienable part of a regulatory compliance checklist.

3. Physical security

Although malware-backed cyberattacks dominate the data breach territory, old-school things like visual hacking are still very much alive and kicking. A prime example of the latter is shoulder-surfing, where an insider looks from behind your back to try and obtain sensitive information shown on your computer.

A specially crafted protector mounted onto the display significantly raises the bar for such abuse. For example, the Vintez privacy screen restricts the viewing angle of a display down to 30-60 degrees so that content is only visible to the person right in front of it. Plus, it prevents eye strain by curbing 96% of ultraviolet and reducing blue light by 65%.

4. Regular security audits and vulnerability assessments

Stress-testing the network for security loopholes is a go-to approach for banks. It reveals vulnerabilities early and helps prioritize the fixes to ensure a proactive security posture. For instance, when a penetrating test is underway, ethical hackers mimic the actions of real intruders to find the shortest way into a target network. Other worthwhile techniques include red teaming and bug bounties.

5. Access controls and authentication

Implementing rigid access controls and multi-factor authentication (MFA) is paramount to data privacy. Access to sensitive customer data should be restricted to authorized personnel only. This approach is a fundamental building block of the least privilege principle, which is often combined with the zero-trust cybersecurity philosophy. MFA adds an extra layer of security by requiring multiple forms of verification, such as a password and a fingerprint or a smart card, before granting access.

6. Incident response plan

Despite all precautions, security incidents can still happen. Therefore, it’s crucial for banking institutions to have a clear-cut incident response plan in place. It outlines how to identify, respond, and recover from data breaches while minimizing data exposure and customer harm.

7. Employee training and awareness

It’s common knowledge that employee slip-ups fuel some of the top threats to organizations. To address this concern, banks should provide comprehensive training to their teams on data security best practices. Staff should be aware of the prevalent industry-specific risks, phishing attacks, and the importance of concentrating on customer data protection. A culture of data privacy plays a role in today’s banking industry climate.

A few extra considerations

Protecting customer data isn’t only a reasonable precaution for banks; it’s an obligation. Some laws impose strict requirements on how financial entities handle such information. The top examples are the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA), and the Gramm-Leach-Bliley Act (GLBA). Non-compliance can entail significant penalties, so it’s imperative for banks to understand and adhere to these regulations. Most of the tips above are elements of this framework.

With banks holding and managing funds, it doesn’t take a genius to understand why they are on the receiving end of numerous cyberattacks. But an equally important asset owned by these institutions is their customers’ trust. Without proper data privacy measures integrated into the fabric of this business, the consequences can be devastating. Proactive security, combined with well-thought-out privacy policies, can thwart adverse scenarios and contribute to a commendable reputation.