FTC Cybersecurity Louisiana Financial Service Firms
Recently, firms in the financial services sector have faced unprecedented cybersecurity threats and privacy challenges. The growth in the remote workforce and the increase in sophisticated cyberattacks on financial institutions have heightened the number of potential risks facing the industry.
As a result, the Federal Trade Commission announced the new updates on the Safeguards Rule to strengthen consumers’ data from security breaches and cybercriminals. Financial firms will have to identify qualified IT experts to oversee the implementation of this new rule. Essential Solutions, LLC has a team of IT professionals you can depend on for high-quality tech services in Louisiana. We can assist in all the program updates and compliance and implement cybersecurity solutions to prevent potential security breaches. Read on for more insights.
Who Is Impacted by the New Updates?
The Safeguards Rule applies to all financial firms, whether big or small, provided they are significantly engaged in availing of financial products or services. And although this rule doesn’t apply to banks, it applies to entities such as payday lenders, courier services, non-bank lenders, check-cashing businesses, professional tax preparers, real estate appraisers, and mortgage brokers. The rule also applies to other businesses like ATM operators and credit reporting agencies since they also store details about clients of other financial firms.
Moreover, all the entities under the Safeguards Rule should make the necessary steps in ensuring that their service providers and affiliates comply with safeguarding clients’ details.
Requirements for the New FTC Rule
All entities covered under the Safeguards Rule should have a security plan that clearly shows how their program safeguards clients’ details. Also, the plan should be appropriate to the entity’s complexity and size, the nature of its activities, and the sensitivity of the data it handles.
Below are the requirements that each entity must fulfill:
- Service providers: You should select the right service providers with the skills and expertise to maintain the required safeguards in Louisiana, such as Essential Solutions, LLC.
- Identify one or more qualified individuals: Every financial firm must identify a qualified person to coordinate the information security program. This person can be an employee of the firm, a service provider, or an individual employed by an affiliate.
- Reports: The individual you’ve identified to coordinate the new program should generate an annual written report to the board of directors each year about the firm’s information security program.
- Multifactor authentication: You should implement multifactor authentication for all persons accessing networks containing customers’ details. An entity should consist of a combination of categories such as possession factors, inherence factors, or knowledge factors.
- Risk assessments: The new rule also requires all the entities to prepare a written risk evaluation that addresses specific criteria for assessing the security threats and risks. Additionally, you must evaluate customer details’ integrity, availability, and confidentiality. You should demonstrate the best way to mitigate the identified risks in the risk assessment.
- Encryption: The new FTC rule requires financial service firms to encrypt all their clients’ information at rest and over external networks.
- Continuous monitoring and testing requirements: An institution’s information systems should be constantly monitored. You can also undertake vulnerability evaluations every six months and penetration testing annually for the risks identified in your assessment report.
Timeline for Compliance
Most aspects of the Safeguards Rule, such as risk assessment, continuous monitoring and testing, and identifying a qualified individual, should take effect in a year from the day of publication. This means financial institutions should comply by October 2022. Note that the other portions should be effective 30 days after publication.
Essential Solutions, LLC Is Here to Help
At Essential Solutions, LLC, we have well-trained and highly knowledgeable IT professionals who can assist you in implementing the new Safeguards Rule. We have an excellent reputation in Louisiana for consistently providing reliable IT solutions since 2002. Contact us today to schedule a no-obligation security review of your firm’s overall security strategy.