How to protect financial data

When you manage invoices, banking statements, or employee salary information every day, even a simple task like sharing a file with your team can put private data at risk. With the finance sector dealing with more breaches than any other industry, enhancing your protection against cyber threats and human error is essential for keeping client trust and complying with regulations. 

Read on to learn how to protect financial data by adopting a cloud content platform with a secure environment for sensitive information. 

What is financial data? 

Financial data refers to quantitative information about the financial performance and status of a business or an individual, including details on income, expenses, assets, liabilities, and equity. Let’s review a few examples: 

Top reasons to strengthen your financial data protection 

Financial data is often a cyberattack target because it contains sensitive information that bad actors could exploit for fraud, identity theft, or unauthorized monetary gain. Increased financial data protection enables you to: 

Mitigate ransomware attacks 

In 2023, 64% of financial organizations worldwide reported ransomware attacks. This is where criminals encrypt systems or files until someone pays a ransom to access the decryption key. 

Strong security controls create a layered defense that makes it difficult for criminals to promote ransomware attacks or exploit weaknesses in your systems. 

Avoid legal and financial penalties 

Legislations in the financial sector require the secure handling of data, and non-compliance with these regulations can result in hefty fines and lawsuits. For example, the Gramm-Leach-Bliley Act (GLBA) specifies that financial institutions implement measures to safeguard customer information, including data security practices, notification of breaches, and protection against unauthorized access. 

Enhance customer trust and loyalty 

No one wants to do business with an organization that puts data at risk, and one breach of data is a breach of trust. Whether by criminal or accidental mishandling of data, these incidents affect your reputation and damage your business’s public image, so protection becomes crucial to prevent PR nightmares. 

Key steps to protect your financial information 

Research by the Ponemon Institute shows that 65% of financial service companies are concerned about cybersecurity as a whole, but only 31% are effectively preventing cyberattacks. Strengthening your security posture with robust authentication methods, data encryption, and ongoing monitoring helps ensure the integrity of your financial data while protecting your information from threats and misuse. 

Follow these steps to protect financial data with cloud document storage: 

1. Select a secure cloud provider 

Storing financial data requires robust cloud security. When choosing a service provider, make sure it offers best-in-class features: 

• Advanced authentication: Ensure only authorized individuals can initiate transactions, reducing fraudulent activity 
• PII data classification: Identify and categorize personally identifiable information (PII), strengthening both protection from breaches and compliance with data privacy regulations 
• Malware and threat detection: Get alerts about potential security incidents in real time, allowing you to investigate and mitigate risks such as unusual login attempts and suspicious file activity 
• Tamper-proofing controls: Prevent unauthorized modifications that could compromise data integrity 
• Data leakage prevention (DLP): Implement controls to prevent unauthorized transmission of sensitive financial information outside secure networks 
• Compliance with financial regulations: Designed to allow customers to adhere to regulatory standards such as GDPR, PCI DSS, and GLBA to protect customer data and avoid penalties 

2. Implement granular access controls 

Not everyone within your company needs access to all client data. Granular access controls allow you to limit who can access specific financial data based on their roles or permissions. 

Let’s say your organization offers mobile banking, cryptocurrency trading, and other financial services. With granular permissions, you control who can: 

• View customers’ bank account details 
• Approve money transfers 
• Use the cryptocurrency trading platform 
• Access sensitive data from specific locations and devices 

With an enterprise content management platform, you keep all sensitive information in one place and can set up a secure vault to mitigate the risk of internal leaks and misuse of client data. 

3. Add extra authentication steps 

Passwords alone are no longer enough. Multi-factor authentication (MFA) offers an extra security layer by enforcing a verification step, like a code from your phone, to access an account. 

Another form of authentication is single sign-on (SSO), which allows you to keep the same username and password to log in to multiple websites and applications. These advanced methods improve information security and make it more difficult for cybercriminals to take over accounts. Even if they obtain a password through phishing scams or malware, they still need access to the second factor to gain entry to financial systems. 

4. Enable financial data encryption 

File encryption scrambles the information, making it only accessible to users with the decryption key. This measure adds another layer of defense in case of data leakage or loss. 

Make sure to implement encryption in financial data at rest or in transit. 

• Encryption at rest secures sensitive information on storage to protect it from unauthorized access, even if stolen 
• Encryption in transit means scrambling data while it’s being transferred between systems, safeguarding it from interception on networks 

See how to encrypt files in the cloud.

5. Leverage automation to prevent data loss, leaks, and breaches 

Human error is a risk for data loss, leaks, and breaches across all industries, but it’s particularly concerning for financial data. Imagine the headache of accidentally sharing sensitive client tax documents with the wrong recipient. It could expose income details and other highly confidential information, potentially leading to identity theft, financial fraud, and severe damage to client trust. 

According to IBM, the average cost of a data breach in the financial sector reached $5.90 million in 2023, making it crucial to automate processes like data classification, threat detection, and remediation to minimize the risk of disclosing sensitive financial data due to human mistakes and cyberattacks. For example, automation notifies your IT department if a team member sends a large number of emails to external addresses outside of standard business practices. This could be a sign of a potential leak, allowing for automatic remediation, such as instantly blocking the user account. 

6. Ensure compliance with financial data regulations 

As any financial service company, you ensure compliance with PCI DSS, GDPR, SOX, and more. These regulations dictate where client data must be physically stored, how it’s accessed and transmitted, the level of encryption required, the frequency of security audits, the procedures for data breach notification, and more. 

When choosing a secure cloud provider, look for options with: 

• Data centers situated in compliant regions: Ensure that financial data is stored or processed in locations that comply with applicable data residency requirements 
• Data privacy and industry regulation covering: Maintain compliance with retention policies and industry standards 
• Content governance: Streamline risk mitigation with legal holds and advanced trash controls to permanently delete what is needed 

7. Use retention schedules to meet your industry regulations 

Financial institutions have legal obligations to retain client data for specific durations. In the case of the GLBA, for example, you must retain information related to certain financial products and services for at least five years after the customer relationship ends. 

With retention schedules, you define how long financial data should be retained and when it should be securely deleted. It ensures that information is kept only for as long as necessary for legal or business purposes and is securely disposed of when no longer needed. 

Financial services in the cloud enable you to set retention policies, legal holds, and advanced trash controls, minimizing administrative burdens and delivering better customer experiences. 

8. Manage third party risks 

Imagine if your company partners with a fraud detection service that analyzes loan applications in real time based on social security numbers, income information, and credit history. Now, imagine if this partner somehow exposes this sensitive data online. 

You might rely on third party applications to handle specific tasks, potentially involving access to your client’s data. But managing these relationships is crucial to ensuring their security practices are up to par. Thoroughly vet your partners to ensure they share your commitment to financial data security. 

9. Conduct regular security audits 

Regular security audits involve systematic reviews, tests, and assessments of your IT infrastructure, policies, and procedures to uncover gaps before cyber criminals do. 

By leveraging document audit trails through the cloud, you keep track of all the activities in your files, including: 

• Who accessed documents: Ensure a clear record of who viewed or modified a document that may contain bank account details, credit reports, and asset statements 
• What changes were made: See exactly what edits were made and by whom to maintain data integrity and allow for easy rollback if necessary 
• When the document was accessed: Track the timestamps for access attempts, identifying unusual patterns that might indicate suspicious activity 
• From where the document was accessed: Audit trails reveal the IP address from which a file was accessed, helping identify potential breaches from unauthorized geographical regions 

Secure your financial data with Box 

Box makes it easy for you to store, share, and protect sensitive information in one place. In the Intelligent Content Cloud, you manage your entire content lifecycle, from organizing your files to sharing them securely from any device. 

We help financial service companies of all sizes build a comprehensive strategy to safeguard confidential content. Our zero-trust controls include SSO and MFA support, device trust, encryption, and more. 

Box Shield automatically classifies new and historical files to help you ensure your customers’ data privacy and security. We also streamline data governance, helping you comply with regulations such as GDPR, PCI DSS, and FINRA. 

Contact us so we can help you protect your financial data. 

While we maintain our steadfast commitment to offering products and services with best-in-class privacy, security, and compliance, the information provided in this blog post is not intended to constitute legal advice. We strongly encourage prospective and current customers to perform their own due diligence when assessing compliance with applicable laws.