Recently, there has been an increase in data breach cases hitting the headlines involving foreign cyber-espionage groups, hackers, and even hostile foreign governments. There has been an increased loss of sensitive data for criminal purposes. The lending sector is amongst the most affected businesses and should overlook the implementation of security measures.
Data security involves protective measures being put in place to avoid unauthorized access to databases, computers, and websites. The process also consists of protecting data from corruption and loss; without a good plan, there can be major consequences.
Besides, employees have been and are still the cause of data breaches. In some cases, vendor employees get email phishing attacks. In another violation, hackers gained access to networks obtained from the employee’s log-in information. Other violations involve sending fake requests for log-in information verification as some employees tend to u8se the same password for their business and social accounts.
However, most of the data incidents don’t involve hacking; it involves human mistakes and error. And if an employee gets poorly trained, a company may end up losing billions on cybersecurity. But still, such risks can reduce through procedures, proper policies, training, and auditing.
The question now that lenders should be thinking about is not on how to adopt the new digital lending technologies but rather on which technologies meet their needs. That is why eVault, a remote digital lending scenario, has emerged after the COVID-19 outbreak allowing lenders to satisfy the customers’ digital loan requirements.
What is the importance of data security in the lending sector?
8 Importance of Data Security in the Lending Sector
1. Avoid Data Breaches
When it comes to employees’ and clients’ transactions and records, every organization must handle information security diligently. Data breaches have negative consequences for lending sectors. That includes;
- A damaged brand reputation
- Loss of clients trust
- Financial lost
- Negative impact on future profits
- Legal consequences involving breaches
2. Ensure Business Continuity
Data is the primary core of most businesses’ operations and decision-making processes. Meaning no business functions without data. For instance, have you ever thought of waking up one day, and all your data gets lost due to a natural disaster, breaches, or equipment failure. In case of such conditions, businesses will be unable to function. Data security guarantees that daily backups are made; therefore, all information remains secure and updated.
As much as more advanced technologies are developed to prevent data breaches, hackers have become savvier. They have developed more advanced techniques to evade the security measures put in place. If a company puts less or no emphasis on data security, they are the biggest target for data breaches. The most targeted business areas include networks, websites, laptops, computers, peripheral equipment, and a lack of awareness about data security.
4. Types of Data Security Control
Understanding data security helps the lending sector formulate new data security measures. Some of the data technologies that can support and secure a company data includes.
5. Backups and Recovery
Data security also involves a plan of how to access the client’s and company’s data in case of a data breach, disaster, or system failure. That is only possible with regular backups. The process involves making a copy of all the data and storing it separately on other devices like disks, tape, or cloud.
The purpose of authentication is to check if the provided user credential matches those in the database. The authentication process used today may involve the use of Pin, swipe cards, passwords, or biometrics. This technology determines what the authenticated user sees on the website or server.
Data encryption enhances data security by using an algorithm and encryption key to turn the regular text into an encrypted ciphertext. Only the user with access will be able to encrypt the data.
8. Deleting and Erasing
If electronic data is not needed, it has to be deleted permanently from the system. If erased, the data can overwrite, becoming irretrievable. There is a little difference between deleting and erasing. Erasure hides data making it easy to retrieve.
Many people believe that exploiters target large companies because of large payoffs. But, larger and small lending businesses have more data, which is why hackers exploit them more. But still, safeguarding business data is crucial if you want to maintain and attract more clients to your business.