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How to Meet the Challenges of Compliance in Finance

May 26, 2020 | Blog

Finance is one of the most heavily regulated industries. Companies in the finance industry must follow both Service Organizational Control (SOC) and Sarbanes-Oxley (SOX) compliance regulations to meet internal and federal standards for data security, access control, and record keeping.

These compliance regulations protect the security of customer financial data while allowing clients to access their information. Regulations also dictate how long financial data and records of transactions must be preserved. The rise of fintech, or financial technology, has created challenges for banks and brokerages by increasing the risk of data breaches and loss.

The 2019 Sarbanes-Oxley Compliance Survey found that companies spend a significant amount of time and money on meeting compliance. Financial organizations often turn to third parties to ensure compliance standards are met. To meet the challenges of compliance regulations, financial institutions must leverage advances in network security and work with data center, network, and cloud providers that undergo compliance audits.

The Challenges of Financial Compliance

Financial-Compliance-with-Firstlight-SolutionsSOC 2 compliance was set up by the American Institute of CPAs to ensure that financial institutions have technology in place to keep client data both secure and accessible. To maintain SOC compliance, financial organizations must archive records of transactions and undergo regular audits.

SOX compliance was established by the federal government after the financial scandals in the early 2000s. Under SOX, the leaders of financial organizations that fail to keep thorough and accurate records of transactions can face up to $5 million in fines and up to 20 years in jail.

These compliance regulations affect organizations using the cloud to store data and require that financial companies monitor their networks and have alerts in place to notify them of any attempts at unauthorized access.

Compliance in the Cloud

Financial organizations that use cloud need to work with a partner that will be accountable for compliance. The public cloud is an excellent place to store data, however, when companies move their data to the cloud, it may be unclear as to who is responsible for data security.

It helps to partner with a cloud provider that is experienced in working with financial institutions and is familiar with the compliance challenges of the industry. Your company’s cloud provider should be certified in SOC 2 compliance and undergo regular audits. The ideal cloud partner will provide 24/7/365 monitoring to ensure client data is protected from unauthorized access.

Meeting Compliance Through Network Security

Compliance-Through-Network-Security-Firstlight-SolutionsWorking with a network provider that offers both data security and peak levels of performance is crucial for financial companies that want to meet compliance while also satisfying clients. Financial data needs to be transmitted quickly and securely. Traditional encryption methods slow performance, creating the risk of investors missing out on financial opportunities.

Financial institutions should work with network providers that supply a secure, high-speed, low-latency network. Today, encrypted wavelength is the gold standard for encryption. Encrypted wavelength protects data at the transport layer, without impeding performance. Access is controlled with user authentication so clients can access their financial information, but bad actors cannot.

Partners in Compliance

To earn the trust of their clients and avoid penalties for non-compliance, financial institutions must form partnerships with technology providers that understand and enforce compliance measures.

FirstLight has ample experience providing both cloud and network solutions to banking and finance organizations. FirstLight’s meet SOC 2 Type II compliance standards. We undergo regular audits and provide around-the-clock monitoring to guard against breaches.

The FirstLight cloud is supported by our extensive fiber optic network that spans the Northeast. Our network customers benefit from encrypted wavelength. Our encrypted wavelength offering delivers encryption at Layer 1 for maximum performance speed to ensure the effective transmission of financial data.

Get more details on how FirstLight delivers compliant cloud. Read our Cloud Overview.

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