Since its implementation in 2018, the EU General Data Protection Regulation (GDPR) has become a pivotal piece of legislation for safeguarding personal information. This regulation has significantly altered how we handle data, influencing communication between businesses and consumers.
As identity theft and cyberattacks increase, complying with GDPR is more critical than ever. Given that banks and financial institutions manage more data than most other sectors, it is essential to adhere to GDPR at every stage, especially when communicating digitally. Before we delve deeper, let's start with a brief overview of GDPR.
The General Data Protection Regulation (GDPR) is the European Union’s privacy law, which came into effect on May 25th, 2018.
It applies to all companies that sell to or store personal information about citizens in Europe.
When considering what ‘personal data’ encompasses, common aspects that require protection include individuals’ names, email addresses, social networking details, bank information, medical history, and location.
The overall aim is to give individuals greater control over their data. Their rights now include:
With consumers now in control of their data, what does this mean for businesses?
Contrary to popular belief, GDPR isn’t just an IT issue – it has far-reaching implications that affect entire companies.
Firstly, non-compliance can be extremely costly. Firms that fail to meet the basic principles of GDPR can face fines of €20 million or 4% of global revenue (whichever is greater). This serves as a strong deterrent for those considering pre-GDPR practices.
Companies now have an obligation to take greater accountability for the data under their care, implementing new and essential processes to ensure the privacy of their customers' personal information.
For financial firms, adopting a clear data management strategy is crucial to meeting GDPR requirements. This strategy should cover data tagging, tracking, encryption, quarantining, and destruction.
To achieve this, a culture of protection must be fostered across all company areas. Organisations need to scale security measures based on risk, with outbound communications remaining a significant concern today.
Customer interactions are increasingly digital, a trend accelerated by the pandemic.
Businesses now communicate with consumers online, conducting Know Your Customer (KYC) and anti-money laundering practices that were previously handled in person.
One primary channel for this is email, with an estimated 316 billion messages sent and received each day in 2021.
While collecting data through emails offers convenience for both firms and clients, it brings several GDPR implications.
This is because a crucial aspect of GDPR legislation is information security, as outlined below:
Personal data must be 'processed in a manner that ensures appropriate security of the personal data, including protection against unauthorised or unlawful processing and against accidental loss, destruction, or damage, using appropriate technical or organisational measures.'
This requirement covers both physical and cyber measures. Firms need to have adequate security to prevent data from being accidentally or intentionally compromised.
For cyber security, this means protecting online assets – from websites to email communications – against breaches and cyberattacks.
Email, unfortunately, was never designed to be secure. Initially developed as a simple file-sharing tool among MIT students, email lacks the built-in security necessary to protect sensitive data from interception or breaches.
Financial services are 300 times more likely to be targeted by cybercriminals due to the vast amounts of sensitive customer data they handle. 62% of financial services organisations predict a rise in email threats in the future.
An email data breach can severely damage consumer trust in the affected company, harming its reputation and leading to customer loss.
For businesses that frequently use email for sensitive communications, this is particularly concerning for GDPR compliance. One ICO-recommended method for mitigating potential threats is email encryption.
Often combined with authentication technology, email encryption is a critical component of outbound email security.
Encryption scrambles or disguises emails, ensuring the content is unreadable to unauthorized third parties.
There are various types of encryption in use today, such as Transport Layer Security (TLS) and Office Message Encryption (OME), each offering different levels of protection. To learn more, you can explore this page.
Mailock, our secure email solution, uses military-grade AES-256 level encryption to protect sensitive customer data.
Coupled with two-factor authentication and email auditing and revoke capabilities, Mailock is the industry standard for secure email.
By protecting advisers and providers from the negative effects of a breach, Mailock helps users remain GDPR compliant.
How GDPR Impacts Financial Services Organisations, EY, 2023.
Daily Number of E-Mails Worldwide, Statista, 2021.
Cyberattacks Impact Major Threats to Financial Firms, Business Insider, 2019.
The Relevance of Email Security in the Finance Industry, DuoCircle, 2023.
A Guide to the Data Protection Principles, ICO, 2023.
A Guide to Data Security: Encryption, ICO, 2023.
Sabrina McClune, 19.06.24
Sam Kendall, 19.06.24