Document Security in Finance: Best Practices, Challenges, and Regulatory Compliance

The finance sector is an easy target for cybercriminals. With the increased digitization of financial services, banks, and other institutions, there is abundant data for attackers to steal. Needless to say, document security in finance is incredibly important.

Documents form a critical component of the data ecosystem in financial institutions. There are documents related to business operations, policies, and customers, all of which may contain sensitive information. This information in the wrong hands can result in legal ramifications, not to mention reputational damage.

The finance sector must also comply with regulations, which adds another layer of complexity. Then there are other challenges like legacy systems, third-party applications, remote access, and paper trails.

This article further expands on document security’s importance in finance, its challenges, and the best practices to follow.

Why Document Security is Critical in Finance

Consider this statistic—three-quarters of finance companies have had at least one breach in the last five years, compared with two-thirds overall.

Securing financial documents is essential for the very survival of any bank, lender, or other finance institute. Here’s why:

Protecting Sensitive Financial Information

Financial institutions handle sensitive data, including customer financial records, transaction histories, and investment portfolios. They also handle documents with personally identifiable information (PII). For instance, customers are generally required to submit identification documents like an identity card or a driver’s license containing personal information like name, address, and social security number.

Customers expect their banks to protect their information when they open an account or use other services. Similarly, corporations and investors working with financial institutions want their data and money secure.

Loss of information via breach of sensitive documents can cause irreparable damage, not to mention legal consequences in terms of fines and litigation fees.

Regulatory Compliance and Document Security

While customers expect strict security, governments have also imposed regulations on the financial sector to ensure data protection and privacy. Then, there are other finance-specific regulations to protect customers from fraud and damage, which, to some extent, also involve document security.

Here are common data security and privacy regulations for financial document security compliance:

• MiFID II (Markets in Financial Instruments Directive II): MiFID II requires secure storage of financial records and transaction data for a minimum of five years.
• Sarbanes-Oxley (SOX): SOX mandates secure financial record-keeping and audit trails for public companies.
• PCI DSS (Payment Card Industry Data Security Standard): PCI DSS ensures secure storage, transmission, and encryption of payment data.
• CCPA (California Consumer Privacy Act): A U.S. state law that grants consumers certain rights regarding their personal data.
• GDPR (General Data Protection Regulation): GDPR imposes strict controls on personal financial data, requiring encryption, secure storage, and data breach notifications in the European Union.

Customer Trust and Business Continuity

Documents should also be secured to maintain and uphold customer trust. Clients are entrusting their information and funds with financial companies. If they can’t protect documents, customers may not want to keep their assets or funds with them. They might take their business elsewhere, threatening the financial institutions’ very existence. There have been many cases in the past where data breaches resulted in loss of customer trust.

Document security is also an essential component of business continuity. Employees and customers should have continued access to critical documents even in case of an attack or technical issue. Proper backups and secure access to them ensure information availability and business operations continuity even when push comes to shove.

For instance, bank relationship managers should be able to access documents with signature specimens to continue serving clients and providing them with necessary services.

Common Document Security Challenges in Finance

Whether documents are paper-based or digital, securing them can be quite a challenge. There are obvious threats like malicious attacks but also technical and operational roadblocks.
Here are the most significant challenges document security needs to address in the finance sector.

Cyber Threats Targeting Financial Institutions

Some of the most recent consequential data breaches have involved financial institutions. Because these institutes handle sensitive information and money, they’re the prime target of malicious parties. They can even get caught in the middle of political battles, as foreign states know that paralyzing a country’s financial institutions can be incredibly damaging.

There are all sorts of cyber threats faced by financial organizations:

• Malware: Malicious software is used to steal data, encrypt systems, or disrupt operations. This can be introduced from outside into the systems of the enterprise.
• Ransomware: A type of malware, ransomware is arguably the biggest threat to the finance sector. Attackers encrypt or steal data and demand a ransom for its release. Although ransomware attempts have decreased since 2021, they still remain a significant threat.
• Phishing: Attackers send emails or messages to trick individuals into revealing sensitive information. Employees or customers may become targets of phishing and compromise sensitive documents.
• Identity Theft: Cybercriminals steal personal information to assume someone else’s identity and commit fraud. These attacks primarily target people’s identification documents, which banks often carry.
• Insider Threats: Employees with access to sensitive data may misuse their privileges for malicious purposes. For instance, a rogue employee may sell information on the dark web.
• Distributed Denial of Service (DDoS) Attacks: This attack involves overwhelming a system with traffic to render it inaccessible. Attackers usually carry out this kind of attack to disrupt operations. For instance, customers may not be able to access online banking.
• Cloud Security Breaches: Attackers may exploit vulnerabilities in cloud infrastructure to steal or manipulate data. While financial institutes typically don’t use public clouds, the private cloud is still under threat. Sensitive documents on the cloud can get compromised.

Handling Legacy Systems and Paper-Based Processes

Although financial organizations have publicly made efforts to go paperless, the truth is that many operations are still paper-based. Also, the finance sector continues to rely on legacy systems they’ve custom-built for themselves. Since finance companies use proprietary software and hardware, they tend to have old systems and equipment still in place, which is a significant document security risk.

Paper-based documents can get lost or end up in the wrong hands if not appropriately stored and digitized. Similarly, legacy systems with security vulnerabilities may be exploited by bad actors, inside or outside.

Compliance with Evolving Regulations

Regulatory compliance for finance document security is constantly evolving. As new threats emerge or governments change, new rules and regulations are introduced for companies. Since the finance sector is heavily regulated, it faces the most regulations, making compliance more complex.

Banks and other financial organizations must optimize their document security strategy and practices per these regulations. They need to dedicate sources to track changes in regulations and ensure that business processes involving sensitive documents are compliant.

Managing User Access and Authorization

Securing financial documents calls for strict access controls and authorization checks. Since financial companies are typically large-scale, managing access controls can be challenging. Things get even more complicated when third parties are introduced, for example, through acquisitions or mergers.

Financial institutions need an elaborate access control policy to ensure documents don’t get compromised, which is part of their security policy. Role-based access control (RBAC) is the go-to strategy for most organizations, but implementing it on a large scale isn’t always easy.

Plus, this policy and its implementation need to be updated regularly to comply with regulations.

Insider Threats

Financial institutions are particularly vulnerable to insider threats, where employees or contractors may misuse access to sensitive information. Security policies and measures also need to account for these insider threats as much as outsider threats.

Again, access controls are needed to secure access from within. Not every bank employee needs access to documents with sensitive customer information like social security numbers. Access should not only be controlled but also monitored, so any malicious actions can be dealt with swiftly.

Remote and Mobile Access Risks

With the increased trend of remote work, financial documents are accessed more frequently via mobile devices. This has opened a new door for threats.

Whether it’s an employee logging in remotely or a customer accessing their documents from their home, the connection needs to be encrypted and password-protected. While it’s easier to implement secure access with on-premise infrastructure, securing remote access calls for more advanced measures and continuous monitoring.

Best Practices for Securing Financial Documents

Document security in finance has many challenges, but they are not without solutions. The suggestions below cover the base well and ensure tough document and information security.

• Encryption and Secure Storage: All sensitive financial documents, such as credit card applications, statements, contracts, appraisals, etc., should be encrypted in transit and at rest. Ensure documents are encrypted before they are shared via email, messages, or other media.
• Role-Based Access Controls: Implement role-based access, ensuring only authorized individuals can access specific documents. This reduces the risk of unauthorized data exposure.
• Digital Signatures and Audit Trails: Use digital signatures to verify document authenticity and implement audit trails for tracking document access, edits, and modifications. These measures help ensure compliance with regulations like SOX and MiFID II, while also increasing accountability for internal audits and investigations.
• Automated Document Conversion and Secure Workflows: Users must convert document formats based on their needs or the application. Use an automated conversion tool like that provided by MST’s universal converter. This makes it quick, easy, and secure to convert formats. Also, conventional documents can be digitized into accessible formats to secure them digitally.
• Regular Security Audits and Risk Assessments: Security is an ongoing process that must be continuously monitored and improved upon. Financial institutions should regularly audit their document security procedures, identifying vulnerabilities and addressing emerging risks. Review policies, audit incidents/events, and get feedback from stakeholders.
• Secure Document Disposal and Lifecycle Management: Finance document lifecycle security starts when a document is created or acquired and ends when it’s disposed of. Any document should be securely achieved or destroyed to protect sensitive information. Again, the document’s lifecycle should comply with data protection and privacy acts.

How MST Solutions Enhance Document Security in Finance

MST’s document solutions seamlessly align with the requirements for document security in finance. More importantly, they address some of the biggest challenges and concerns related to critical and sensitive documents.

MST offers two products: the eViewer HTML5 and the MST Batch Converter. Both these products can support typical document management workflows in banks and financial enterprises. Here’s how these tools help with document security in the finance sector:

• Secure, Encrypted Document Viewing Across Different Devices: MST’s eViewer allows for safe, encrypted viewing across all devices while maintaining strict access controls. Users can securely view documents within the network or outside (remotely on personal devices).
• Redaction and eSignature: MST’s eViewer also features manual and automatic redaction of sensitive financial information, ensuring compliance with regulations like GDPR and CCPA. On the other hand, digital signatures, digital certificates, and audit trails allow institutions to track document activity and maintain secure records for compliance purposes.
• Format Conversion: Finance companies can easily change the file format of documents, even in batches. MST Batch Converter is compatible with dozens of file formats, including legacy ones no longer supported by modern applications to enable your organization to be able to utilize these files again.
• Integration with Legacy Systems and Modern Platforms: MST’s solutions seamlessly integrate with legacy and modern financial platforms, ensuring document security without disrupting workflows. Financial institutions can integrate MST’s software with their existing systems with APIs.

Case Study

WorldPay, a global leader in payment processing, faced challenges in managing payment processing disputes due to its complex vendor and partner network.

They implemented eViewer 5, MST’s secure and easy to use document viewing solution to streamline dispute resolution. eViewer facilitated efficient dispute resolution and addressed WorldPay’s need for a secure document-viewing application for internal and external users.

The solution allowed for scanning, uploading, and retrieving documents in TIFF or PDF formats, splitting documents into categories, and saving them in specific TIFF formats. eViewer’s integration into WorldPay’s systems improved transaction dispute processing and strengthened vendor relationships.

Conclusion

Document security in finance is an integral component of information security. Files containing sensitive information are susceptible to cyber attacks, insider threats, and loss. To mitigate these risks, financial institutions must implement robust security measures. These measures include encryption, access controls, data loss prevention (DLP) solutions, and regular security audits.

Additionally, educating employees about security best practices and creating a culture of awareness is crucial. By prioritizing document security, financial institutions can protect their assets, maintain customer trust, and comply with regulatory requirements.

MST’s solutions can help finance enterprises embrace security in their document workflows. Contact MST to learn more!