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Proposed Security Guidelines Impacting Financial Services Compliance Costs

Federal regulators are developing information security rules for the financial services industry to protect customer data. But executives at affected banks, brokerages, and insurance companies say mandating stringent security requirements, such as encrypting stored or transferred data, will increase their costs . . . . Federal regulators are developing information security rules for the financial services industry to protect customer data. But executives at affected banks, brokerages, and insurance companies say mandating stringent security requirements, such as encrypting stored or transferred data, will increase their costs and potentially impair data-sharing arrangements they have with business partners. Corporate legal, business, and IT departments will be involved in implementing the rules, and according to Bill Bradway, an analyst at Meridien Research, in Newton, Mass., "when you add up those collective costs for a big organization, it's clearly in the millions of dollars to get [compliant processes and systems] up and running." Industry officials are urging regulators to issue the security requirements as guidelines rather than regulations, thereby giving financial institutions flexibility to tailor information security programs to their specific needs. The link for this article located at InfoWorld is no longer available. . Government agencies are establishing guidelines for safeguarding sensitive information in the finance sector, prompting worries about potential hikes in expenses.. Financial Services Security, Data Protection Compliance, Information Security Rules. . Anthony Pell

Oct 10, 2000 • Anthony Pell Government