The financial industry is responsible for processing some of the most highly regulated information there is. As stewards of such sensitive material, industry professionals are often at higher risks for security breaches and costly noncompliance fines, resulting from failure to meet the many standards of government regulations created to protect consumers. This emphasizes the importance for any financial institution to treat privacy and data security as a critical concern. Here is a closer look at some of the financial regulations that are important today and what security tools your company can utilize to ensure ongoing compliance.
The Right to Financial Privacy Act
Among the earliest regulations to financial security is the Right to Financial Privacy Act (RFPA), created in 1978, which according to the FDIC, “establishes specific procedures that federal government authorities must follow in order to obtain information from a financial institution about a customer’s financial records.” RFPA aims to protect consumers by requiring that federal government agencies notify an individual before any personal financial information is disclosed to another government agency. This practice gives the consumer the opportunity to object or take action. Under RFPA financial information is often protected from government agencies without the use of a subpoena, legal action or customer consent.
The Gramm-Leach-Bliley Act
The Financial Services Modernization Act of 1999, also known as The Gramm-Leach-Bliley Act, is one of the most important aspects of financial regulations today. The act involves monitoring the financial industry in areas including privacy policies, information-sharing practices, and data safeguarding. According to the Federal Trade Commission website, “The Gramm-Leach-Bliley Act requires financial institutions – companies that offer consumers financial products or services like loans, financial or investment advice, or insurance – to explain their information-sharing practices to their customers and to safeguard sensitive data.” With this said, the Gramm-Leach-Bliley Act primarily focuses on both The Financial Privacy Rule, which governs the collection and disclosure of personal financial information, as well as The Safeguards Rule, which requires all financial institutions to design, implement and maintain the necessary safeguards needed to protect consumer data.
Fair and Accurate Credit Transactions Act
The Fair and Accurate Credit Transactions Act of 2003, or FACTA, is an extensive set of regulations focusing on fair credit reporting, fraud and identity theft. The act’s various regulations affect nearly every individual and business in the US to this date. FACTA aims to help consumers stay informed about the possibilities of credit fraud by protecting the right to one free annual credit score check, along with other provisions, such as red flag notifications, according to the FTC. For financial institutions, it is also important to be acquainted with FACTA’s disposal rule, which protects individuals from identity theft by monitoring the destruction of all sensitive consumer information. Failure to comply with this law will likely result in substantial civil liability. Victims may seek statutory damages of up to $1,000.00 per violation, leading to class-action lawsuits, which can cost companies millions or even potential bankruptcy.
Staying Compliant Through Data Security
While the various number of financial data security acts might seem daunting, it is important to understand that your company does not have to navigate them alone. Finding an Enterprise Content Management solution through a trustworthy company like URM Technologies, Inc. is a crucial step in protecting your institution from the legal strain and monetary fines associated with noncompliance. The professionals at URM are compliance-specialists who truly understand the highly sensitive nature of your firm’s financial data. Features such as SecureDrive and precision destruction services exceed compliance standards, offering top-tier, risk-free security for your sensitive information. The possibility of unmet regulations is handled by our qualified experts, who aim to provide our clients with stress-free knowledge that their business and highly confidential material is always safely guarded.
URM Technologies, Inc.
At URM, we understand the ever-changing, complex regulations that are geared towards the financial industry. Contact one of our team members today for more information on how we can meet your compliance needs.