Posted on Jun 3, 2021
Customer data privacy concerns are quickly growing as more users become aware of how their data is being used by companies. With access to copious amounts of sensitive customer data, financial services organizations cannot wait for a breach or attack to occur before implementing effective plans for data management.
To successfully leverage customer data while maintaining compliance and transparency, the financial sector must adapt its current data management strategies to meet the needs of an ever-evolving digital landscape. Let’s take a look at some of the mounting data management challenges for the financial services industry, and review the leading trends emerging as a result:
Financial services data management refers to the processes, systems, and policies that allow financial organizations to oversee confidential or other sensitive information and ensure continuous compliance with both existing and emerging regulations. Today, financial services companies can leverage tools such as artificial intelligence and machine learning to enable more comprehensive, continuous data management across growing network infrastructures.
Data management can present challenges for financial organizations tasked with managing large amounts of highly sensitive customer data, including credit card information, bank account information, pin numbers, and more. With that said, it is a critical aspect of cybersecurity that cannot be overlooked. Let’s review some of the leading challenges in financial services data management:
There are many factors contributing to the ever-expanding digital attack surface including the use of third- and fourth-party vendors, a shift to remote work environments, widespread cloud adoption, and the expansion of end-user mobile banking solutions. With these considerations in mind, it can be challenging to gain complete visibility into all aspects of your organization’s cybersecurity posture.
Some financial systems are still operating with a mix of paper-based, electronic, and phone-based solutions, and uniting these information sources can be challenging and potentially lead to fraud concerns. Organizations across all industries are struggling to break down organizational silos, as they can lead to segmented data access and the implementation of multiple point solutions that only address one particular aspect of cybersecurity and data management. This inhibits collaboration across departments and can lead to overcomplicated solutions being set up to try and overcome the resulting challenges.
Financial services data originates from many different sources, and organizations need to ensure that they’re leveraging the most reliable, high-quality data possible. Additionally, many organizations are beginning to leverage Big Data as an investment opportunity, although few have the proper systems in place for keeping such sensitive information protected. For this reason, it’s also important for organizations to find a way to effectively consolidate all of this information for more centralized management.
The financial services industry is no stranger to compliance standards and regulations, with many already following the guidelines laid out by key regulations such as Payment Card Industry (PCI) Data Security Standards (DSS) and Bank Secrecy Act (BSA). Even still, organizations are struggling to keep up with emerging requirements, putting them at risk of non-compliance which can result in significant legal fines and reputational damage.
Despite the mounting challenges, effective data management can unlock a range of benefits for organizations. Explore 6 trends in financial services that can help combat the challenges around data management:
The average customer is becoming more aware of the ways that organizations collect, store, and distribute their private information. As a result, transparency is quickly becoming a popular trend in financial services as organizations work to establish trust with, and instill confidence in, their customers. Maintaining transparency in data management can also help your organization demonstrate that steps are being taken to keep critical information and assets protected.
As previously mentioned, compliance management is a growing challenge for the industry. As a result, many organizations are building comprehensive compliance management programs that can help IT security teams account for risk and ensure compliance is being maintained, even as new regulations enter the landscape. Defining a compliance management program can also help guide employees on best practices for maintaining proper cyber hygiene.
Employees can be the first line of defense against cyber attacks, as they are often targeted by various social engineering attacks, such as phishing, an attack method that attempts to gain unauthorized access to a network via fraudulent emails or other forms of communication. According to a recent report by Anti-Phishing Working Group (APWG), in the last quarter of 2020, financial institutions were among those most frequently victimized by a phishing attack. Establishing a cyber-aware workforce is critical, and employee cybersecurity training is one way to do so. Getting the entire workplace involved in this way can help employees better understand how to identify and respond to potential threats should they come up.
Many organizations are beginning to take advantage of solutions that rely on technologies like artificial intelligence (AI) and machine learning (ML). Roughly two-thirds of senior financial services industry decision-makers expect to see a positive impact as a result of AI. By leveraging these advanced capabilities, organizations can streamline data management operations, enable automation for improved efficiency, and in some cases, gain actionable insight into how to improve workflows and address any potential security gaps.
Working with third- and fourth-party vendors can help organizations streamline their operations and deliver a better experience for their customers. However, it’s important to remember that a threat to your vendors’ cybersecurity posture is a threat to your own organization’s cybersecurity infrastructure as well. This is why third-party vendor risk management is an extremely important component of successful data management in financial services.
Personalization is another popular trend in financial services at the moment as customers have come to expect tailored experiences and recommendations based on their unique wants and needs. An example of this is Erica, Bank of America’s financial digital assistant that offers personalized recommendations to users based on their specific banking history and purchase data. Initiatives like this mean that more customer data than ever is being collected. As they begin embracing new ways to meet the customer where they are, organizations must take the steps now to ensure that the copious amounts of data they have access to is being successfully protected.
The financial services industry is undergoing rapid digital transformation, and as a result, many are now responsible for large amounts of highly sensitive customer data. Managing this data can be challenging as the threat landscape grows in size and sophistication and the customer becomes more aware of data privacy concerns.
With SecurityScorecard, organizations can maintain complete visibility across their entire IT ecosystem to more easily detect and respond to potential cyber threats that may be targeting financial services data. IT security teams can continuously monitor cyber hygiene with Security Ratings, which offer a simple rating of their organization’s cybersecurity posture across ten groups of risk factors. This enables teams to detect threats to sensitive data as they show up, identify any gaps in existing security controls, and make data-driven decisions about how successful data management can be achieved.
The financial services industry is shifting, and with the right cybersecurity programs and solutions in place, organizations can confidently embrace change while maintaining customer trust and regulatory compliance.
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