The banking sector has been through the mill over the past couple of years. Yet as the sector works through the aftermath of the economic turmoil and seeks to innovate with customer service initiatives, many are taking big risks over potential loss of customer data.
Why? Well because adequate safeguards may not be in place to protect confidential data during the testing and development of new web-based services and applications. Worse though, keeping bank accounts secure is not the only risk they’re running – many may not be meeting the data privacy standards required by the regulators.
Informatica looked into this issue at some depth recently in a study titled, Financial Data at Risk in Development: A Call for Data Masking, which focused on how the financial sector in the UK is going about developing new customer services and applications. The findings were stark: 41 per cent of IT professionals from banks questioned said that their organisations were less stringent in protecting customer data during testing and development stages compared to once the new platforms were live. Almost three-quarters of them lacked confidence in, or were uncertain of, their capabilities in protecting customer information during these early stages of development.
These appear to be pretty fundamental shortcomings in data management best practice. But why are they even happening? It’s difficult to speculate, but responses to some of the other questions we asked indicated that often no-one takes proper responsibility for ensuring data privacy during application or web service development.
In all, it’s a warning signal to the finance sector. Best practices need to be put in place to ensure data privacy. Banks have always had to innovate and increase efficiencies with new software, but by leaving themselves exposed to data breaches and regulatory breaches they are playing with fire.