Hi secureinsight.com administrator, Thanks for the informative post!
“Data privacy” and “data security” are terms most lenders are hearing over and over again these days. The reasons for this are numerous but include the CFPB’s focus on the issue, increased publicity over data breaches in business and industry, and heightened concern by consumers about how their sensitive non-public information is being managed by banks.
Although data privacy and data security are terms that are commonly used interchangeably, they in fact mean different things. A data security policy is required to ensure that data privacy is protected. When a lender is entrusted with a borrower’s highly private information, the business must develop, implement and manage a security policy to protect this data. So data privacy identifies that personal and private information which must be protected and how it may be used in a business in an appropriate manner, while data security includes the means and methods used to ensure the security of the data both internally (from employee breaches) and externally (from third party breaches).
Data privacy rules mean that lenders must define and police the appropriate use of borrower data within their walls. This includes what data is gathered (relevance to services), who has access (need to know), and where data is stored (how long and how safe). Both the CFPB and the Federal Trade Commission have jurisdiction over the mishandling and misuse of consumer data, and each may enforce penalties against lenders that have failed to ensure the privacy of a borrower’s data. At a minimum, lenders must screen employees with access to private data regularly, have an appropriate policy in place regarding handling of data, and test these policies on an ongoing basis.
Data security encompasses your company’s practices and processes that are in in place to ensure data is not being used or accessed by unauthorized individuals or parties. It ensures sensitive data is accurate and reliable and is available when those with authorized access need it. A data security plan includes facets such as collecting only the required information, keeping it safe, and destroying any information that is no longer needed. These steps will help any business meet the legal obligations of possessing sensitive data. A data security policy is simply the means to the desired end, which is data privacy. However, no data security policy can completely overcome the efforts of third parties bent on hacking into databases and seeking access to consumer data to monetize for improper and illegal purposes. At a minimum, lenders must develop written data security policies that include safe storage of data and penetration testing of their backup systems (local and/or cloud) to search for gaps and leakage.
Knowing that there is no such thing as a foolproof data security system and that all systems are ultimately vulnerable to breach by determined criminals, lenders must demonstrate a commitment to adopting the most stringent policies relevant to the size and scope of their business, while also considering purchasing crimes and cyber liability insurance to off-load risk in the event of unexpected and unintended breaches.
Making sure all borrower data is private and being used properly can be a near-impossible task that involves multiple layers of security. Fortunately, with the right people, process and technology, lenders may support their data security policies through continual monitoring and visibility into every access point and with insurance back-up.
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