How financial institutions can take control of their data
posted by James Boyd on Tuesday, January 28, 2025 in SHAZAM Blog

Financial institutions have large amounts of personal and financial data about their customers. Therefore, they must ensure their data is accurate, secure and compliant with regulatory standards. If not, it exposes financial institutions to potential compliance failures, security incidents, and operational inefficiencies. Here are some suggestions to keep in mind to make sure your financial institution is in control of your data.
Understand your data
Different types of financial data require different levels of protection and classification. A data classification policy helps categorize information based on sensitivity and what could happen if that level of information is a part of a security incident.
A data classification policy should include a classification for personally identifiable information. Create an inventory of your data so you can easily identify where this information used to identify an accountholder is stored and what elements of personally identifiable information are used.
Know your legal and compliance requirements
Financial institutions must meet minimum standards for data processing security to protect privacy, confidentiality and availability of information. These regulations mandate strict guidelines on data handling, processing and storage to protect consumer data against misuse and security incidents.
Therefore, financial institutions should know the privacy rights they must comply with and form procedures to satisfy potential requests from those organizations. Double check federal and state regulations and industry trade groups for changes to compliance requirements and stay up to date on these rules and regulations on a regular basis. That way, you can stay ahead of important changes to retention requirements on topics like privacy data.
Many states passed their own privacy bills after California passed CCPA in 2018. CCPA gives customers in California certain rights in terms of how companies process their personal information.
Staying up to date on your requirements also applies to your contracts with vendors and consumers. Analyze your contracts with vendors and consumers to understand your privacy responsibilities. Contact your legal counsel if there are any questions or concerns with these contracts.
Data retention
Data retention and disposal are an essential part of business management and regulatory compliance. Financial institutions need to retain data related to customer accounts and transactions according to applicable state and federal retention requirements.
Put procedures in place to ensure data is both retained for as long as required and deleted when required and in a manner that aligns with the appropriate level of confidentiality. One regulatory example is related to anti-money laundering requirements of five years. Permanent deletion of retained data is particularly challenging if data is determined to exist in transaction logs or backed up in multiple systems. One common method to address secure deletion of data is done by encrypting the data when stored and then deleting the encryption key after a specified retention period.
To verify how these policies or procedures are implemented, financial institutions should document standards, train staff and test backup and restore capabilities to verify they work as planned.
Securing your data
New technologies and compliance regulations impact your risk exposure and compliance with regulatory guidelines. Bring this knowledge to your financial institution with SHAZAMSecure®. Our internal auditors, risk consultants and network security analysts have industry and real-world expertise to help keep your institution safe and secure.
Financial institutions also have a legal responsibility to keep customer data safe and protect it from cyberattacks or unauthorized access. Here are some ways to protect your financial institution from online threats.
About the Author
As vice president of information security, James Boyd is responsible for developing and maintaining SHAZAM’s security program. An active technology and cyber security professional with over 20 years’ experience, he’s earned designat
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SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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