Data breaches are on the rise in financial services, making it the most attacked industry in the world. Financial Services experience 65% more data breaches than average organizations, according to IBM’s X-Force Research Team, with its study highlighting that “cybercriminals are waking up to the extent of banks’ lax security faster than the institutions themselves”. So, it’s no wonder that new rules and regulations, such as the General Data Protection Regulation (GDPR) and New York State’s DFS Cybersecurity Regulation are being enforced.
All financial services organizations face a constant flow of new rules and regulations governing their activities on a national, regional, and international basis. No matter what size a business is, almost every part of its activities will be affected by regulation. Any violation will attract often punitive fines and lead to damaged reputations.
1 – Define compliance processes and then automate them
From May 25 2018, any banks that deal with European customers will have to comply with GDPR and protect the personal data of their customers or face commercially ruinous fines and reputational risk. GDPR gives control over data back to the EU’s citizens and protects them against misuse of their personal data. Organizations will be fined up to 4% of their global revenues – or €20 million, whichever is greater – for any breach of the regulation.
Becoming GDPR compliant means facing major changes in privacy rules and finding ways to protect private data. But rather than seeing the GDPR compliance deadline as a day of reckoning, banks should view it is an opportunity to standardize their operations.
Collecting all the required data to comply with these requirements will not be easy. Process automation will help firms to address the requirements of GDPR. Managing increased rights of customers, meeting responsibilities to protect data, and enabling data privacy by design and by default are all possible with a Digital Process Automation approach. Firms can use their requirements for GDPR to implement a data governance layer between their systems and their business processes, supported by a digital platform.
Digital Process Automation helps to align rigid but reliable legacy systems to modern digital services that are created on the platform. With DPA, banks can model and automate the processes needed to meet the requirements of regulation, in areas such as data privacy and reporting, underpinning compliance with regulation while also facilitating innovation.
2 – Create reports to help you demonstrate compliance
A significant element of the regulatory environment is reporting; authorities increasingly require financial services firms to provide high-quality reports, sometimes in real-time. Reporting is regarded as an important safeguard for the financial industry, enabling authorities to quickly act on potential problems.
Reporting is an integral component of GDPR. Firms have a duty to report certain types personal data breaches to the relevant supervisory authority. They must do this within 72 hours of becoming aware of the breach. Robust breach detection, investigation and reporting procedures must be in place, and firms must keep a record of any personal data breaches. This is where Digital Process Automation can come into its own and give companies peace of mind that they are being compliant and control the processes of a data breach.
While regulatory reporting can often be viewed solely as a burden, a US-based fund services firm has leveraged it to provide greater business intelligence. Their DPA efforts were driven by an objective to standardize operations, increase visibility of data, and ensure regulatory compliance. By implementing a workflow automation tool from Bizagi, the organization was able to introduce consistent practices to data workflows from disparate sources. The company also improved the visibility of its data, which previously had been difficult to aggregate, consolidate, or expose.
3 – Use your GDPR processes to find ways to add value
In any company, those delivering a project can easily lose sight of the fact that once the project is complete, the team must continue to deliver value to the organization. If your bank goes through the process of ensuring GDPR compliance, you must make sure there is support for the product not only during implementation but on an ongoing basis – or full value won’t be delivered. Strategic initiatives must ensure the product or project is supported, not only during implementation, but on an ongoing basis so the full value is realized.
It’s not just GDPR that is affecting the way that financial services are approaching their data security. Brazil, Mexico, and Japan are also implementing or considering strong controls for personal data. The 2017 Data threat Report from Thales found that 72% of global financial services say they are affected by data privacy regulations, showing a global focus on data residency and security.
Continuing to deliver an automation project that supports GDPR can help financial services to achieve regulatory compliance. Not only will this help you to avoid any financial penalties but also dodge the damaging long-term repercussions on customer perception and loyalty to your brand.
To find out more about how banks can leverage digital business platforms to achieve rapid product innovation in a highly-regulated market, download our free white paper, ‘Harnessing Digital Process Automation to Drive Transformation’.