Financial Data Breaches: The Need for Encryption for Financial Services

Imagine diligently backing up your bank’s most important data. You know how crucial backups are in protecting the financial institution from data loss. You also recognize that storing those backups onsite does no good in the case of a fire so you regularly transport backup tapes to another location for safekeeping. But what happens if those backup tapes containing banking customer data such as names, Social Security numbers, account numbers, and credit card numbers go missing? Can’t happen? Sure it can, and it did.

According to Privacy Rights Clearinghouse’s Chronology of Data Breaches, TD Bank in New Jersey lost two data backup tapes containing customer names, addresses, Social security numbers, account numbers, and credit and deb card numbers when transporting them between bank offices in March 2012. 260,000 customers from Maine to Florida were notified of this breach.

This is but one of hundreds of data breaches attributable to lost portable devices such as laptops, USB drives, and backup tapes affecting financial institutions reported on the Privacy Rights Clearinghouse website. It also illustrates the need for encryption for financial services.

If those backup tapes where encrypted, they could go missing without any consequences to the bank’s customers. With encryption, the tapes become meaningless garbage to anyone who happens upon them. Without encryption, the tapes could easily give up those valuable account and credit card numbers.

File encryption software exists, and it’s easy to use once set up. If you’re involved in IT for a financial organization, put encryption for financial services at the top of your to do list. With the right enterprise file encryption software protecting the network, you can encrypt all sensitive data on servers, individual hard disks, laptops, tape backups, mobile devices, and even removable storage. In fact, some file encryption software will even allow you to lock down USB ports so employees cannot copy data to USB drives without authorization.

Don’t let your financial institution become the next listing on the Chronology of Data Breaches; make encryption for financial services a top priority.

Daniel is an exceptional author in the technology world, having written articles on examiner, techcrunch and mashable. He enjoys sharing his knowledge on computer and network security with resources coming from companies such as WinMagic, Microsoft, and the Computer Security Institute.