Concerns about data privacy are of the utmost importance for lending and credit underwriting businesses in the financial sectors. A compromise of the sensitive data that financial institutions manage for their customers in the course of lending and credit underwriting has serious repercussions. Data privacy is becoming the primary focus due to increased awareness from regulatory bodies, general awareness and cyber-attacks on India institutions. The issues are further aggravated in case public clouds are not used in a secure manner. 

Importance of Data Privacy   

Data privacy relates to the control of customer data accessibility by organizations; data that stakeholders and clients provide to businesses, with whom they have to coordinate. For business purposes financial institutions need to collect specific details of people for lending purposes. However, they need to ensure that the data is protected and not shared with any 3rd party without user consent. As you can understand, maintenance of privity of such sensitive information is paramount in this context.  

Risks of a data breach  

Protium identifies the five biggest risks to the cyber security of any financial institution as follows: 

• Spoofing/impersonation 
• Malware/Spyware 
• Unauthorized access 
• Unaware/untrained employees 
• Faulty/unauthenticated web applications 
• Unencrypted information  
• Non-secure third-party services 

Consequences of a data breach 

• The reputation of the targeted institute gets tainted because news of the data breach remains perpetuated on the internet.  
• Diminishes the trust people have in the financial firm; they may cease to be customers. This deals a heavy blow to the client base and, resultantly, the bank’s income.  
• Unexpected expenses are incurred as a consequence of the data breach, and the budget will be hard to manage.  
• Current employees lose their jobs when their institution is cyber-attacked. Further, potential employees begin to shun the unfortunate firm. 
• Owing to the private data of many, the targeted financial institution has to deal with lawsuits and legal penalties.  
• Theft of the deposited money in the concerned bank.  

Financial Institutions, Security and Consumers — a Close Nexus of Trust 

Customers use their bank cards to make purchases with the knowledge that their financial institution has adequate security measures in place to guard against the theft of their data. Also, they provide their personal and financial details for lending or insurance services. 

Data security issues occur when staff members, security personnel, and other individuals responsible for preserving sensitive information don’t implement sufficient security practices or follow them. They use weak credentials or synch their credentials with their personal emails. This flaw gives hackers a simple approach to gaining access to the internal systems of their firm.  

When institutions don’t have enough security measures in place to thwart hackers trying to steal data, it not only affects that organization but also the partners and customers whose data is stolen. Making sure a company’s data security measures are sufficient is a continuous and challenging endeavor and requires dedication starting from top management, security team and last mile employee working in a remotest branch office. 

How should financial institutions approach data privacy and security?  

When Data privacy and security are critical concerns for financial institutions, given the sensitive nature of the information they handle. Here are some approaches financial institutions can take to ensure data privacy and security: 

• Implement a robust data protection framework: Financial institutions should implement a comprehensive framework that includes policies, procedures, and controls for protecting customer data. This framework should cover aspects such as data classification, access controls, encryption, data retention, incident response, and disaster recovery. Financial institutions should also ensure complete compliance with all data security-related regulations and standards. This includes regulations such as the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). 
• Conduct regular risk assessments: Financial institutions should conduct regular risk assessments to identify and evaluate potential threats to their data privacy and security. This can include both internal and external threats, such as cyberattacks, data breaches, and employee malfeasance. 
• Train employees on data privacy and security: Financial institutions should ensure that all employees are trained on data privacy and security best practices, including how to handle sensitive customer data, how to identify potential security threats, and how to respond to security incidents. 
• Use secure technology solutions: Financial institutions should use secure technology solutions that are designed to protect customer data. This can include solutions such as encryption, firewalls, intrusion detection systems, real-time monitoring systems and anti-virus software.  
• Have a response plan in place: Financial institutions should have a response plan in place in case of a security incident. This should include steps to contain the incident, investigate the cause, notify customers and regulatory authorities, and take corrective action. 

By taking these steps, financial institutions can minimize the risk of data privacy and security breaches and ensure that they are complying with applicable regulations and standards. 

Protium’s philosophy of engineering finance 

When it comes to the protection and preservation of personal information, Protium’s secure in-house tech capabilities built on public cloud, prove to be robust. 

This keeps data security and access to data as primary building blocks of our engineering finance philosophy, which is a cohesive collaboration of tech, risk, and data and analytics to ascertain specific customer requirements and create innovative solutions. To ensure the sanctity of the overall lending procedure, we guarantee the following facilities: 

• Applications architectures to keep data encrypted in transit and at rest. 
• Application of uniform data access guidelines across the board. 
• Complete visibility on who accesses private information. 
• Identification of ungoverned data, categorization, and evaluation of its vulnerabilities. 
• Improving the speed of incident response and resolution. 
• Detection of dangers such as unusual online behavior, data espionage, privilege escalation, the establishment of suspect accounts, brute forcings, etc.  
• Cutting down risk in both production and non-production settings. 

What does Protium’s model of data privacy entail? 

1. Encryption of KYC data  

Protium takes personal information security seriously and data is protected through encryption, which scrambles all the classified information into an unreadable format using public cloud infrastructure. Not only personal information, but all information from the point of capturing to storing in databases is encrypted. The entire KYC data is encrypted and only applications can access this information via secure APIs using subscription model. The encryption keys are access controlled, that means the data once scrambled cannot be read by anyone. These services are hosted in private networks in public cloud and are protected by strong firewalls and network configurations. 

2. Role-based access control (RBAC) 

RBAC is a technique for controlling application access based on the roles of specific users inside an organization. 

Its foundation is the idea of positions and privileges. Access is determined by the role and responsibility of the employee. Based on the roles, the use of certain programs, as well as network access, could be restricted — sensitive information, thus, has lesser chances of being leaked or falling into the wrong hands. The access is reviewed at regular intervals to keep it updated and safe. 

3. Secure Microservices 

Since microservices make the backbone of protium’s lending stack for any operation performed and all the information travels through these services. All APIs are authenticated, authorized and encryption enabled with subscription-based access model. HTTPS with TLS 1.2 is a requisite for the use and construction of APIs, and as such, it would act as safeguard against leakages. 

Microservices secrets/credentials are never a part of application code instead are derived at run time based on application roles and environment. 

4. Secure Computing devices 

Protium ensures secure computing devices for its employees by encrypting and protecting the computing infrastructure with the latest antivirus solutions. The devices are segmented at the network layer to limit the impact of any affected devices, and constant monitoring is in place to oversee the computing, branch, and firewall infrastructure.  

5. Data Loss Prevention (DLP) Practices 

Data Loss Prevention is the action of identifying and stopping breaches of confidential credentials. Protium’s stringent password encryption and cloud backup strategies provide the greatest degree of protection, visibility, and control while allowing their employees to collaborate freely and with confidence. Financial institutions dabbling in lending and credit underwriting activities use DLP to secure their data and comply with regulations. 

Conclusion 

The requirement for financial institutions to maintain the privacy of data grows along with the frequency of processing personally identifiable information as well as the threats of cybercrimes. 

Institutions must put in place a data protection framework that offers instructions on how to protect data. Protium’s services will assist a company in ensuring the security and responsible usage of all data kept on its servers. Additionally, it will provide the organization with direction and structure for any necessary modifications and their precise application.