Secure file sharing for finance & banking

Fast and secure data transfer is a basic necessity in the financial landscape. Financial institutions, investment companies, and banks all rely on this key aspect of the business to proffer excellent services to their customers.

Although file transfer solutions have been employed in financial institutions in the past, the issue of security of sensitive data hasn’t been well addressed. Let’s face it- trust is a lubricant in the current dynamic finance and banking industry. The loss of this lubricant in any way creates a massive dent in the industry.

Being the case, you can easily understand why professionals in this field have a plateful to worry about.

Data transfer for financial organizations

Employees in financial organizations push massive volumes of critical data on a daily basis. It is imperative to protect this data and monitor its access to prevent data breaches and cyber-crimes like phishing. The best and safest way to achieve the security and integrity of this data is through ultra-secure data transfer solutions that suit such critical workflows.

These solutions help banking and other financial institutions to securely hold and transfer data to and from customers or between departments. .Once implemented in your firm, you can relax knowing that the valuable files you exchange within the organization are unsusceptible to unauthorized access.

Automated File Transfer

Automated File Transfer (AFT) refers to the programmatic flow of files in a department or organization. There are several benefits to automated file transfers, including:

• Fast movement of large data sets
• Timely data transfers which eliminate hold-ups
• Help meet organization, industry and regulatory standards and requirements

Various automation software options can be used to realize automated file transfer. The right choice for your firm will depend on a couple of factors such as firm needs, risk level, and of course, your budget.

You can opt for workflow automation, robotic process automation, or SFTP client. We recommend the later as it is the most straightforward and budget-friendly option. With SFTP client, system admins in financial organizations can configure file transfers to happen automatically. Not only does this maximize efficiency, but it also facilitates compliance by creating controlled and automated secure file transfer processes.

FTP or SFTP: Which is more suited for the finance industry?

Firms in the financial sector are required to conform to the set standards security- and compliance-wise when it comes to sensitive data. There are several regulations in place to safeguard customer data and the organization at large.

Nine times out of then, failure to adhere to these regulations is costly. For starters, it leaves your firm exposed to threats and risks. In addition, it attracts fines from authorities in charge. Fortunately, avoiding these outcomes is easy, and all you need is a file-sharing solution that meets compliance regulations and secures critical files.

But it is not all direct, and you may find yourself debating between FTP and SFTP. Below we highlight some of the factors you should take into account:

Data Security

This is undoubtedly the top priority considering most of the information that flows into and out of a financial organization is highly valuable. The heightened need for security and control in financial institutions necessitates secure data exchange approaches.

FTP predates recent cybersecurity provisions that guarantee security. It is also not encrypted, making it an impractical choice. SFTP guarantees data integrity through AES and Triple DES encryption. Besides, SFTP connections can be authenticated via SSH keys, which introduces an additional security layer.

Port

SFTP, by default, uses port 22 for data transfers, although it can be re-configured to run on another port when necessary. Unlike SFTP that uses a single encrypted channel, FTP utilizes different ports. Of the two, the former is better suited for firewall policies and much easier to employ.

Regulation Compliance

Firms in the finance realm have to abide by strict security and compliance requirements. Compliance with these regulations can be a hassle since organizations have to adhere to multiples regulations at the same time.

The most common regulations in this sector are the PCI DSS (Payment Card Industry Data Security Standard), GLBA (Gramm–Leach–Bliley Act) and SOX (Sarbanes–Oxley Act).

Achieving compliance with these standards is a multifaceted task that involves meeting all the requirements, auditing, and staying up-to-date with any modifications. SFTP, as compared to FTP, ensures effortless compliance.

Compliance issues affecting the finance industry

Among other effects, the 2007–2008 global financial crisis (GFC) brought about massive regulatory amendments in the finance industry. Most of these changes have made compliance costly and much more difficult. Here are some of the compliance challenges banks, brokers, and other financial institutions face:

1. Staying abreast with consumer laws

It’s not news that consumer laws have been a stumbling block to most financial institutions. The problem stems from the fact that there are several laws to abide by and rapid changes to these laws.

2. External cyber-attacks

Most of the data handled by financial institutions is sensitive and very valuable. This makes financial organizations targets of hackers and cybercriminals. Cyber-attacks such as phishing and ransomware affect daily operations and can hamper compliance efforts.

It is a good thing regulators have brought better policies and measures to help tackle cyber-related problems. Unfortunately, firms still struggle to adopt some of these programs designed to prevent threats.

3. Financial Technology

Technology has been and is an influential force in the finance realm. From improved speed to reliability, it has made things easier. However, it has also significantly made compliance more difficult.

FinTech (web-based business, online commerce, and digital currencies) have intensified threats and risks. It is now up to financial institutions to work out a balance between security, profit, consumer protection, and risk management.

4. Costs

Most people associate the word cost with fines and penalties due to the failure to comply with regulations. By cost, in this case, we’re referring to expenses and monetary input in achieving compliance. Some organizations use up to a tenth of their revenue to attain compliance.

Other problems include outdated infrastructure, lack of appropriate tools to facilitate compliance by staff, and lack of proper awareness. Industry pundits project that these issues will become more stringent as the regulatory landscape and technology advance.

How SFTP contributes to compliance in the finance space

Data protection regulations dictate that all organizations in the financial industry safeguard all sensitive data. All networks, user access, databases, and business processes ought to be secured to prevent unauthorized access or theft of customers’ Personally Identifiable Information and financial data.

SFTP solutions provide robust encryption to data transfers, elaborate audit reports, and access/delivery to the right person(s). More importantly, they come with security features, and that facilitate the compliance of GLBA, GDPR PCI, and SOX requirements.

Compliance with data regulations is a requisite for any organization that handles data such as credit card information regardless of the geographical scale of the company. It doesn’t matter if yours is local or international, failure to comply with set regulations can attract penalties on top of vulnerabilities in the firm.

Benefits of SFTP in the finance industry

SFTP is an instrumental element when it comes to payment processing payments. The main boons of SFTP in this sector include:

Promotes remote working

SFTP adds more flexibility in the day-to-day work routine way. Employees can easily remotely share files with this indispensable protocol.

Convenient integration

SFTP can be employed on different platforms since it a cross-platform protocol. In a way, this makes integration with existing systems simple and affordable.

Reduced workload

It also harmonizes administration and automation processes giving employees and other staff an easy time.

Conclusion

Files exchanged within banks, insurance companies, brokerage companies, and other financial institutions often hold sensitive and highly valuable data. Due to the sensitive nature of this data, firms involved must use secure file transfer solutions. These solutions eliminate security vulnerabilities and prevent any interceptions or theft.

The spike in cyber-attacks in the recent past leaves no room to negotiate whether or not to adopt these solutions. To avoid compliance challenges, organizations in the financial space have to set aside resources and develop strategies to stay clear of attacks and huge non-compliance fines. It only takes the step of implementing a secure file transfer solution to resolve both concerns.