In the financial services sector, leveraging data enables institutions, such as banks and insurance providers, to enhance value and provide personalized services to clients. However, alongside the value of data comes the weighty responsibility of safeguarding it. Institutions must preserve the confidentiality of non-public information and comply with regulations to prevent fraud and market manipulation. Â
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High Volume of Cyberattacks
The financial services industry has seen a dramatic rise in cyber security incidents over recent years. In 2023, the United States financial sector experienced 744 data breaches, a significant increase from just 138 incidents in 2020. This surge places the industry as the second most frequently targeted sector for cyberattacks leading to data compromises, highlighting its growing vulnerability to evolving threats. Â
Stringent Regulations
Financial companies are tasked robust data governance to comply with regulations aimed at preventing fraud and preserving customer privacy. This includes adhering to Know Your Customer (KYC) protocols, which are critical in verifying the identities of clients and assessing risks of illegal intention. Companies must also safeguard against conflicts of interest, ensuring that employees do not misuse personal client information for personal investment gains.Â
Insider Threats and Fraud Prevention
With the amount of money handled, the financial and insurance industry is a prime target for insider threats, where employees or contractors may be tempted to misuse or steal data for financial gain. Types of sensitive data under threat include financial records, CRM data, strategic business plans and private employee records. Insider threats can be very sophisticated and difficult to detect, causing organizational data and integrity to be compromised. Â
Sharing Customer Data with Vendors
Financial companies handle vast amounts of transaction data daily, including sensitive information like payroll details. Sharing sensitive transaction data across a diverse network of agents, brokers, partner banks, and service providers, each with their varying levels of security, can pose risks of data loss and leakage. Fraudsters can use stolen data to siphon funds from accounts, perform unauthorized transactions, or commit identity theft.Â
Safeguarding Confidential Data in Financial Services
To overcome the challenges surrounding cyberattacks, regulations, insider threats and data sharing, financial companies need to protect the access, handling, and disclosure of data to maintain the confidentiality of non-public information and to prevent data loss. A comprehensive and proactive approach to data security must contain the following elements:Â
Centralized Policy Platform
A unified policy management and data governance system forms the bedrock of effective internal controls. By centrally managing business, security and compliance needs as attribute-based policies, financial institutions can streamline their data governance and maintain regulatory compliance by ensuring consistent application of policies across all organizations and data types.Â
Data-Centric Security Enforcement
Enforcing data-centric security policies in real time is crucial for implementing “need-to-know” access. Policy enforcement enables controls like dynamic data masking, which obfuscates sensitive data with modified content. This ensures that critical fields, such as client account details and transaction histories, remain accessible solely to authorized individuals. It also enables Attribute-based Access Control and Digital Rights Management, which helps to manage complex access requirements and maintain data confidentiality in third-party data sharing. Â
Automate & Prevent
Implementing preventative Segregation of Duties (SoD) controls through automated policy enforcement can proactively prevent conflicts of interest and inappropriate access. This shift from reactive to proactive measures directly addresses the high volume of sophisticated insider threats, ensuring that data integrity and security are maintained without the need for post-incident resolutions.Â
Centralized monitoring
Centralized monitoring serves as a key component in the fraud prevention and risk management strategy of financial institutions. By monitoring and logging of all data access activities in real time, organizations are better positioned to identify suspicious and anomalous behaviors. A centralized activity log also facilitates accurate and simplified audit and compliance reporting. Â
NextLabs Solution
CloudAz Centralized Policy Platform
NextLabs’ unified policy management platform, CloudAz, enables companies to create and implement data security policies that are enforced dynamically at that time of access request. The policies can apply the regulatory controls applicable to the user, data, and environment in real-time, effectively mitigating risks associated with data security and regulatory breaches.Â
CloudAz Dynamic Authorization Policy Engine
During access attempts, the Dynamic Authorization policy engine employs the Attribute-Based Access Control (ABAC) method in real-time, evaluating and authorizing access based on user, device, resource and contextual attributes. This means that each access attempt is scrutinized in detail to ensure compliance with KYC protocols regulatory standards, preventing unauthorized access to sensitive customer data and fraudulent activity.Â
CloudAz Dynamic Authorization Policy Engine
During access attempts, the Dynamic Authorization policy engine employs the Attribute-Based Access Control (ABAC) method in real-time, evaluating and authorizing access based on user, device, resource and contextual attributes. This means that each access attempt is scrutinized in detail to ensure compliance with KYC protocols regulatory standards, preventing unauthorized access to sensitive customer data and fraudulent activity.Â
DAE Data Masking
DAE offers a data segregation and masking solution tailored for the financial services industry, aligning with GLBA and broader regulatory requirements. It dynamically segregates data and masks sensitive information using modified content according to attributes, enabling fine-grained data controls. This approach allows financial institutions to enable access to necessary data while keeping sensitive information confidential, ensuring that only authorized personnel can view critical data.Â
SkyDRM
SkyDRM ensures persistent control over the access and usage of digital information, crucial for financial companies that share sensitive data daily. By using data classification, user, and environmental attributes, SkyDRM dynamically determines real-time access and usage rights to documents, safeguarding it as it traverses a network of agents, brokers, partner banks, and service providers.Â
CloudAz Report Server
CloudAz provides centralized auditing and reporting capabilities that enable companies to demonstrate compliance and ensure the integrity of their data security policies. Compliance reports can include data access, data handling, policy enforcement, and insights into potential security gaps.Â
CloudAz Report Server
CloudAz provides centralized auditing and reporting capabilities that enable companies to demonstrate compliance and ensure the integrity of their data security policies. Compliance reports can include data access, data handling, policy enforcement, and insights into potential security gaps.Â
