What Is Covered in a GLBA Audit?
With a GLBA audit checklist, you’ll be in a much better position to keep your company secure and compliant.
Remaining compliant with all of the laws and regulations that affect your business can be a massive headache—especially in the financial industry, where these regulations are far-reaching and complex. But with the help of an audit, you can better understand where your company is at and identify areas for improvement.
A specific example of this is a GLBA audit, which can help ensure compliance with the GLBA. But what exactly is covered in a GLBA audit, and what can you do to prepare for it?
The Gramm–Leach–Bliley Act (GLBA)
Put simply by the FTC, “The Gramm–Leach–Bliley Act requires financial institutions—companies that offer consumers financial products or services like loans, financial or investment advice, or insurance—to explain their information-sharing practices to their customers and to safeguard sensitive data.”
In other words, if your business is in the financial sector, you’re required to proactively manage and publicize all of your information-sharing practices; you’re also responsible for keeping your customers’ data secure.
What Is the GLBA Financial Privacy Rule?
The GLBA Financial Privacy Rule is a key provision of the act designed to increase customer privacy. Under this provision, financial institutions are not allowed to disclose the nonpublic personal information (NPI) of their customers to non-affiliated third parties. In other words, you’re responsible for not disclosing or leaking the private information of your customers.
Included in these financial privacy rules is the GLBA pretexting rule, which is designed to counter identity theft. Organizations are required to alert customers when an unauthorized user attempts to access or disclose their NPI.
What Is the GLBA Safeguards Rule?
The GLBA Safeguards Rule holds that financial institutions are responsible for informing customers about all information-sharing practices and giving them the opportunity to opt out of further information sharing. Because of this rule, financial organizations are also responsible for designing and executing a security program to protect the NPI of their customers.
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What Are the Penalties for GLBA Noncompliance?
GLBA compliance isn’t something you can afford to ignore. If you aren’t in compliance with these new standards, you could suffer a data breach. If you handle customers’ data irresponsibly or you don’t have ample security measures in place, this could cost your business dearly. Not only will you be responsible for covering any direct damage the breach causes, but you’ll suffer a reputational blow that could affect your business for years, if not decades.
There are also criminal and civil penalties that could apply to your business and the people within it if you do not comply with GLBA requirements. If your organization is associated with noncompliance, you could be subject to a penalty of up to $100,000 per violation. If directors and officers within the institution are found personally liable for noncompliance, you could be hit with a civil penalty of up to $10,000 per violation. On top of that, directors and officers can face imprisonment for up to five years each.
A GLBA Audit Checklist
As you prepare for your GLBA audit, consider these elements of your overall GLBA audit checklist:
Understand the Legislation
Before undergoing the audit, you need to understand everything the legislation covers. The GLBA is a complex piece of legislation, so it’s probably going to take some time for you to fully research it.
Conduct a Risk Assessment
Next, conduct your own risk assessment. It’s important to understand how risk affects your organization and how it relates to the GLBA so you can identify potential weak points and solutions. This risk assessment allows you to document and understand any aspect of your business that processes or transmits NPI.
Verify Effective Controls
Your organization is responsible for protecting customer data, so it’s on you to verify that effective controls and security measures are in place. You should have several tools and technologies to mitigate external threats.
Verify Internal Defenses
Additionally, you’ll need to verify your defenses against internal threats. A single malicious or negligent employee could spell trouble for your organization as well as your customers, so it’s important to educate and train employees effectively.
What Is Covered in a GLBA Audit?
The overall goal is to determine your level of compliance and provide insights you can use to improve if necessary. So, what all is covered in a GBLA audit?
A Thorough Review
A GLBA audit starts with a thorough review of your business. Your devices, networks, and systems are all thoroughly examined. What safeguards do you have in place for your customers? How much risk are you able to reduce this way? Are there any standing weak points that remain?
A Written Plan
If you don’t already have a written plan in place, we’ll help you draft one. Otherwise, we’ll review what you have. It’s important to have verified documentation on how you’re protecting customer information so you can prove your efforts and remain consistent.
New Incident Response Protocols
If a cybercriminal attempts a brute-force attack, how do you respond? Do you have an incident response plan in place? If so, is it sufficiently thorough and actionable? Our audit may lead us to develop new incident response protocols.
Are your staff members adequately trained and educated on best practices for consumer privacy and security? Can they remain in compliance with GLBA? In some cases, organizations require employee education and training on the spot. As your GLBA auditor, we can can provide this.
GLBA audits also provide education and support to leadership within your organization.
Are you confident in your compliance with the GLBA? We can help. Contact us today for more information!
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