Enterprise File Services for Finance Data Security and Privacy

Enterprise file services offer data privacy financial services to save, access, process, track, and distribute financial data. The services offer high and encrypted data security in accounting while complying with regulations specified for data privacy and financial services.

Accounting data security of financial information such as accounts statements, financial data, profits, losses, account details, and transactions of customers is critical for the financial operations process. Financial data privacy is a legal requirement for financial services providers. Any premature disclosures, hacking attacks, involuntary leaks of financial information, customer and shareholder information can violate financial data retention regulations, lead to criminal liability, cause stock manipulation, financial fraud, identity theft, scams, and loss of trust.

Challenges in Finance Data Security

Data privacy financial services face certain unique challenges for financial document storage since they use complex and diverse infrastructure such as applications, technologies, and platforms for processing their data. Challenges are in stored and mobile data when users access and download information. These infrastructures may suffer from some inherent security problems that can increase cyber-security risks.

Other challenges include account and password management, decommissioning access, financial compliance data assessments, confidentiality of sensitive data, physical security, and trained staff that can detect and mitigate threats. While cybersecurity can meet the challenges, other problems make file sharing for accountants risky. such as social engineering, encryption complexities, data discoverability, multiple formats of raw data used for analysis and forecasting, and indiscriminate access through non-trusted connections.

Data breach of data privacy in financial services is an accidental or premeditated action that results in the exposure of financial documents and information that is private, confidential, and sensitive falling into the hands of unauthorized entities. A data breach can result in financial and exponential losses, and it can cost an average enterprise more than $1 million. Exponential costs arise from loss of trust and customer confidence, confidential information falling into the wrong hands, loss of market opportunities, financial fraud, theft of customer identity, and malignant use of proprietary data.

Data Privacy in Finance

The significance of data privacy and data security in accounting is important since individuals and organizations want to control their personal information. Financial data protection and privacy are significant since hackers can misuse personal identity and information to steal identities, hijack passwords, and carry out scams. People may not wish to reveal their health and bank details, social security numbers, and other information to unauthorized entities.

Several regulations are in place to ensure data privacy and financial services. These are discussed as follows:

SOX Compliance: Publicly traded firms have to ensure adherence to SOX regulations.

PCI-DSS: Payment processors and merchants need to comply with PCI-DSS and protect their financial information. This protection covers customer data, transactions, payment details, third-party details, credit or debit card details, and other information.

CCPA Compliance: Organizations dealing with California-based customers must follow CCPA regulations. Data handling practices must be available when requested, and it should be possible to delete customer data when requested.

GDPR Requirements: Firms dealing with EU customers should be allowed to raise requests for data storage and deletion.

HIPAA: Healthcare organizations have to comply with HIPAA regulations to securely store, manage, and disclose patient data.

PII Protection in Financial Documents

For data privacy and financial services, personal Identification information (PII) protection is a key requirement. As per GDPR, PII data security involves hiding and protecting personal information such as name, social security identification, name, bank account, contact information, biometric data, VINS and title numbers, credit card details, PINs, and any other information that can be used to trace and identify an individual.

PII data protection has a critical role in accounting data security. Hackers can use a personal identifier to illegally access other personal information, modify the data, transfer funds, use PII to send fake messages, and carry out a number of other illegal activities. The victim is blamed for the offenses. PII best practices are discussed as follows, and they can lead to improved data security in accounting. It must be clear that individuals and institutions are both responsible for PII protection.

• Design a standardized process for the use of PII data and determine the applicable standards.
• Locate all PII and track their workflow details, such as the sender, how it is used, the types of PII collected at each input point, where and how it is stored, and who has access to PII.
• Classify all sensitive data, encrypt all sensitive data, and restrict access.
• Secure all financial records and provide access to authorized staff only.
• Review and remediate needlessly exposed data, and restrict access.
• Remove and destroy old media and storage areas with PII.
• Train employees and establish procedures to report suspicious behavior.
• Where needed, use virtual private networks.
• Report any data breaches to the concerned authorities and cooperate with them.

Enterprise File Services Solutions

Enterprise File Services (EFS) is an encrypted and secure file management system that offers data privacy and financial services at the enterprise level. It facilitates secure storage with online file sharing for internal teams and customers, allowing a high level of data security in accounting.Users demand capabilities and functionalities in ESF that they can obtain from commercial cloud applications, such as mapping drives and folders, visibility, control, and flexibility. 

With encrypted file sharing, teams use the data for predictive analysis, business intelligence, and strategy planning. If on-premises EFS do not meet the requirements, if they are cumbersome and have low functionality, then users would use unsanctioned EFS solutions that can compromise data security. Therefore, users need an Adaptive Enterprise File Services system that offers mobility, a unified user experience, content intelligence, security and encryption, unified administration and management, and smart reporting and auditing.

The main types of enterprise file services are dedicated and non-dedicated. Dedicated EFS are used as traditional file servers, while non-dedicated servers serve as database and file servers. Operating system file services allow file access to users by default or through permissions, and they are used for trusted internal team file sharing. Internet file sharing allows for file downloading by the public. 

They include P2P file sharing, portal websites where sharing and collaboration are done through a browser, and sharing through file servers where users upload their data and share. Along with speed, accessibility, and functionality, EFS must be secure and comply with regulations. They must allow customization and financial data encryption to maintain data privacy and financial services.

Document management (DMS) solution is an enterprise document management system that allows secure enterprise document management and encrypted file sharing for finance. Typically, finance documents are in different formats, such as raw CSV files, accounting packages, machine-generated output files, Excel, Word, PDF, and others. A robust document management solution allows for secure file sharing and finance, so secure data transfer is enabled.

Document management systems are part of enterprise content management with encryption and meet compliance requirements by automating file protection protocols for on-premises and remote work. 

They should be customizable for enhanced regulatory compliance, disaster recovery, document security, early revision tracking, enhanced collaboration, easy search, increase productivity, be scalable, and allow for secure sharing of content internally and externally. It should allow customizations for sharing, adding tags for categories and sub-categories, document identifiers, adding new documents and tracking versions with effective dates, setting permissions and controlling access, and defining financial data retention policies.

Types of DMS that provide data privacy financial services and secure sensitive file sharing are server-based, database-based, cloud-based, on-premises, and web-based. Based on its functionality, DMS can offer content management, workflow management, record management, document imaging, enterprise content management, and adaptive.

File Encryption and Access Control

File encryption has an important role in protecting financial data. Encryption protects financial data from unauthorized access and prevents data tampering and modification, which are equally dangerous. File encryption uses encryption algorithms that transform data into an encoded format without modification. Decryption keys are needed to open the files. 

Even if a user acquires encrypted files, they cannot be opened. File encryption is done for data in transit when it is transported by sender to receiver and when it is at rest in data centers. Advantages of file encryption are that it offers enhanced security, tighter compliance, lower risks, and stronger trust and privacy. It allows secure collaboration with even remote workers.

Importance of access control is that it allows access to only authorized and identified IDs. It is possible to place files in a shared folder and provide automated access to project teams. It removes the need for manual and individual permissions for users, and authorized people can only carry out specified tasks with the files. Types of data encryption are symmetric and asymmetric. Symmetric encryption uses a single key for encryption and decryption, and some symmetric protocols are Advanced Encryption Standard (AES) and Transport Layer Security (TLS). These protocols are complex and very difficult to crack, but they are simple and fast. 

However, symmetric keys can be compromised with less difficulty. Asymmetric encryption uses a pair of linked public and private keys. It uses algorithms such as the Digital Signature Algorithm (DSA), elliptic-curve cryptography (ECC), and TLS. Asymmetric is less vulnerable and offers multi-factor authentication; however, it is slower and more difficult to manage.

Access control mechanisms help to maintain data privacy in financial services. These provide security safeguards with hardware and software features and physical controls that provide access to authorized users. 

Data security in accounting is facilitated by controlling the type of access that users have and the actions they can take, such as view only or view and modify. They help to secure user accounts and user devices, guard content to prevent data breaches, secure files in storage and transit for remote and on-premises users, and maintain data integrity.

Main types of access control mechanisms are Rule-Based Access Control (RBAC), Role-Based Access Control (RBAC), Mandatory Access Control (MAC), Policy-Based Access Control (PBAC), and Discretionary Access Control (DAC). These methods have varying levels of access control, and security MAC provides the highest level of access control.

Secure Data Transfer and Sharing

Secure data and sharing are important for data privacy financial services. When well-structured methods are followed, it is possible to maintain data security in accounting.

Methods of secure file transfer include using commercial FTP software, such as FileZilla, Core FTP LE, WinSCP, Cyberduck, Bitkinex, WS FTP Pro, and others. These applications use protocols such as File Transfer Protocol (FTP), File Transfer Protocol over implicit TLS/SSL, and File Transfer Protocol over explicit TLS/SSL (FTPeS) that can be used for safe and secure files up to 50 GB, even from repositories or cloud storage that do not support SMB. It is also possible to have version control with timestamps and links to archived files.

While transferring financial data files to specific mapped folders, users should have admin roles. They can open the applications, verify the mapping of the source and destination repositories, view the structure, directories, and folders, and use drag-and-drop functionality to transfer files. If files with the same name are present in the destination folder, then a message asks if the files can be overwritten or a copy uploaded while retaining the older versions. Almost all types of formats can be transferred.

Data migration is a mass file transfer, usually a one-time practice. It is used when migrating from one server to another, and the whole repository can be moved. The two strategies of data migration are Big Bang Database Migration, where all data is transferred in a single operation, and Trickle Down Migration, where smaller sub-migrations are done. Zero-downtime migration replicates data to the target database, allowing clients to use the source database even when the migration is underway.

Best practices for data migration:

• Analyze data: Analyze the type, size, formats, operating systems, source and target systems, and the data size platform. The target should be compatible and have sufficient free space.
• Map folders: Mapping for source and destination folders should be precise. The user should know which files go where and assign automatic permissions and access controls.
• Ensure encryption: Files should be suitably encrypted with on-demand keys.
• Backups and data recovery: Taking backups and using data recovery methods will ensure that even if there is a failure, data is not lost.
• Test and validate: Test the system and validate by opening the files to ensure data integrity.
• Speed: During peak load times, the transfer of large files can take a long time and block the system. Schedule operations for relatively off-peak times.
• Transfer agent performance should be maximized.

Document Retention and Destruction

Data privacy: Financial services must consider document retention policies for higher data security in accounting. Document retention is the method and policies used to store, maintain, and share data files and their versions for a specified duration. Since organizations generate a large amount of data that may not be reused, it is practical and economic to destroy obsolete and outdated files.

For tax, financial, administrative, legal, and historical purposes, old and archived documents must be encrypted and retained in secure storage. Legal and regulatory compliance requires documents to be retained for a period of one to 10 years or more. After the period is over, the files can be automatically purged and destroyed securely. GDPR, ISO 27001, FINRA, CCPA, PCI-DSS, and HIPAA specify the data retention guidelines and frameworks.

Document retention policy is based on the organization's needs and regulatory requirements. Policies are set after identifying legal and business requirements, data types, a data archiving system, meeting requirements for litigation, the frequency of archiving data, and the period for retention. Special, secure storage areas must be defined with discoverability that allows users to search for and retrieve old files. While archived files may not find immediate use, they should be given the same security as data backup.

Secure destruction of archived data that has crossed the retention policy must be done with qualified software. The software should automatically and securely delete the old data as per the retention policy.

Proper record management is essential to comply with regulations and to meet the strategic needs of the organization. When records are securely stored and managed, they can be searched as per the identifier and used for business needs. In litigation, the courts can ask for the old records, and a record management service allows data to be quickly retrieved and offered for inspection. With secure storage, data remains safe; it cannot be compromised or breached.

Data Backup and Disaster Recovery

Data backup in the finance sector is important since an optimized plan can help to recover data lost in a disaster. Financial data can include customers’ transactions, account information, finance data, cost and purchase data, prices, staffing and other costs, and all finance and accounting information. Data security in accounting must have a data backup plan where data is copied into a retrieval system. If the files in the source system are destroyed, corrupted, or if they cannot be accessed, then the whole data can be recovered and the system can quickly go online.

In case of data loss, corruption and destruction of the system, the financial records can be retrieved, implemented, and the organization can resume activities. If data backup is not available, then the company will have to start from zero point. This can lead to loss of business, profits, operations cannot function, the firm is crippled and it cannot operate. Disaster recovery planning helps to develop a data backup schedule, along with remote repositories where the data is backed up.

File services ensure that all the backup data is ready for use when required. The same methods used in storing data in the active system must be replicated in the back up storage system through mapping of shared drives. Protocols must be in place to automatically encrypt and securely store the data, and alternative systems should be available to get the system online with the least interruption in operations.

Compliance and Auditing in Financial Services

Data privacy in financial services needs to integrate data security and privacy and must meet regulatory compliance. Data privacy occurs when data security is present and unauthorized entities do not have access to maintain data security in accounting. Data compliance is the process of adhering to regulations set by the government, industry, and organizations. Data compliance requirements are met when data privacy and security are followed. So, the three are related.

Advanced EFS provides point-and-click functionality to secure files under the preview of regulatory compliances. Admins can identify files that need to be secured, classify data, and ensure the required protection to make the system compliant with regulatory requirements.

Audit trails present a log of IDs that accessed files, systems, and applications, the time when they were accessed, and the actions that were performed. The trail records and reports the time when a file was created, modified, moved, or deleted, the IP address, server ID and location, system configuration changes, and other details. While an unauthorized user will be blocked, the audit trail also helps to find the actions that an authorized user has taken. There are three types: application level, system level, and user level. Since audit trails can be deleted, they are maintained in secure log management, and the data is encrypted. It can also help to investigate hacking attacks. Audit trails are one of the requirements of regulatory compliance.

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Last Updated: 23rd April, 2024