Financial Industry Data Protection

Prioritizing data security is important because of different reasons. Some have to do with compliance (adhering to legal and regulatory requirements is necessary in order to avoid penalties and legal action) and reducing risks (strong data protection minimizes the risks of cyberattacks like data breaches).

Other reasons involve customer trust (incidents erode it), operational continuity (prevention of loss of services and assurance that systems remain functional) and reduction of financial loss (direct loss from ransomware attacks or indirect loss from downtime or recovering data).

One of those challenges is striking the right balance between security and usability. Overly-strict security protocols may frustrate users, obstruct adoption and render the application useless. The key is to implement strong security features in a way that is seamless, making the application user-friendly and logical, while adhering to the regulations.

Another challenge for developers is the integration with legacy systems. Financial institutions often rely on legacy systems built with outdated technologies. Integrating new software with these older systems can be complex and expensive. Careful planning, data mitigation strategies, using modern APIs, are all ways to bridge the gap between legacy systems and new software components.

There's another challenge in staying up-to-date with the changing regulatory landscape. This could include new laws, standards and industry guidelines that don’t interact with each other. In turn, not staying up-to-date may lead to vulnerabilities and perhaps hefty fines. Developers should find an integrated system with a single and comprehensive view of all regulated requirements, to save them future headaches.

Financial institutions often need to integrate their software with third-party systems, like payment gateways or credit bureaus. Developers should take their time and ensure the seamless and secure integration with these external systems.

Of course, one of the biggest challenges is protecting user data in itself.

For starters, understanding the regulations and laws that apply to the specific organization is part of creating strong software security. The laws and regulations related to data protection that mostly affect the financial sector are presented below.

Knowing which regulation applies and understanding all their particulars that apply to your company is of the utmost importance. This also helps you maintain a proactive position in case of audits. Speaking of which, conducting regular internal and external audits can help to identify and address gaps in compliance or data protection practices.

The development and consulting teams should establish a clear and unified set of guidelines for handling data. This ensures everyone involved knows exactly how data is collected, stored, used, and if it complies with regulations.

Using tools to automate compliance tasks and reporting could also streamline the process.

Data security attorneys or consultants could be hired to analyze applicable laws, suggest actions and help stay compliant.

The basis of the relationship between financial service institutions and their clients is trust. This confidence is built on entities' capacity to keep private information out of the wrong hands. A company's reputation and economic operations may suffer significantly and permanently from inadequate data security.

Several basic measures can be taken by developers and other teams alike from the technological standpoint. One of those is disk encryption, which entails converting data on a storage device into code rendering it unreadable to anyone that doesn’t have the decryption key. Data is encrypted using algorithms. An encryption key is used to encrypt and decrypt the data, and the key can be protected with passwords, PINs or biometric signatures. Disk encryption ensures sensitive data remains confidential and protected from unauthorized access. If it's a part of an incident response plan, it can be included in the recovery strategy.

To take it a step further, endpoint security solutions like Zero Trust Network Access can be used on all devices that access sensitive data. ZTNA can significantly strengthen security postures and protect data the way it's required by regulatory standards.

Yet another measure is to use a DLP (data loss prevention) solution to detect and prevent customer data leakage or inappropriate sharing, transfer, or use of sensitive data.

Moreover, cloud services and cloud-based applications can be used for backup and recovery, benefiting from their availability and scalability.

And, of course, a secure infrastructure is always suggested across all critical resources. For example, PCI DSS focuses on different security aspects, like:

A very important aspect of data security is data backup and recovery. Scheduled backups should be done regularly to ensure data can be restored in case of loss or corruption. These backups should be stored in multiple locations, including offsite or in cloud-based solutions. Tests should be conducted in order to ensure recovery processes.

Another very important aspect is access control. An access model can be more or less lax in authentication and authorization requirements. A strict model is ZTNA. Part of the zero trust philosophy, ZTNA is based on is granular access. Granting users access to only the data they need to perform their jobs, or least privilege access control, minimizing the potential damages caused by compromised credentials.

Another way to protect data is by only collecting and storing the data absolutely necessary for functionality, which is called data minimization.

One more measure is to regularly identify and patch vulnerabilities in developed code. Through vulnerability management within the DevSecOps methodology, developers can get to vulnerabilities early, reducing risk exposure. This process involves regular security assessments, through penetration testing and vulnerability scanning, and swift remediation efforts.

Other steps like classifying data based on sensitivity to prioritize protection efforts or creating a comprehensive inventory that maps all data collected and used for transparency, can be taken to address the technological challenges.

At a more general level, an extremely important practice is to create awareness among employees. Training them on data security best practices, phishing scams, social engineering tactics and other dangers that could be triggered by human error should be discussed with them.

Also another important process to share widely within the organization is establishing a documented incident response plan that outlines procedures for detecting, responding to and recovering from data breaches or incidents.

Lastly, PCI DSS has a guide on how to respond to a cardholder data breach and stipulates how organizations should implement an incident response plan. This breach detection and reporting guide provides information like: limiting data exposure, understanding who needs to be immediately informed in case of a breach, and making sure third-party contracts have incident response plans. It also covers in detail when assistance from a Payment Card Industry Forensic Investigator (PFI) should be sought.

As demonstrated in the last section, financial institutions’ defense against threats doesn't encompass just one solution. Your organization can benefit greatly from a multi-layered approach in order to protect your financial assets, which includes user data. Speaking from experience, we at Fluid Attacks know that vulnerabilities can be gateways into networks and that cyber criminals have the means to gain unauthorized access and reach important assets. However, we also know how to prevent cyber attacks that can lead to breaches, ransomware or any other dreadful incident.

Since 2021, our Continuous Hacking solution has strengthened the above company’s security posture by identifying different types of vulnerabilities, reporting them to its developing team, providing insights and suggesting remediation strategies actionable before deploying their software. By the first quarter of 2023, this firm had reduced its risk exposure by 75%. Not only that, but their teams were collaborating more thanks to our processes and platform, both intended to foster teamwork in security matters. They emphasized our proficiency, the usefulness of our evidence of exploitability of detected vulnerabilities and the vast assistance our hacking team offered. You can find more about its success story here.

This financial entity is one of the many, many companies our solutions have helped. By keeping them up to date with their security status with our security testing solution, whose accuracy is made largely possible by the manual penetration testing done by our expert hacking team, these companies know they can rely on us for their vulnerability identification without affecting their time-to-market. We’re always to help, contact us.