GLBA Compliance Checklist: Steps to Keep Your Business Clean 

GLBA compliance requirements and its three core components

To begin with, we need to understand the purpose of GLBA. The main aim of the act is to protect consumers’ personal financial information held by financial institutions. Its primary purpose is to:

1. Protect consumer data: It requires businesses to ensure the security and confidentiality of sensitive data, such as bank accounts, social security numbers, and other personal data.
2. Ensure transparency: Financial institutions must provide customers with clear privacy notices, informing them of how their data is collected, used, and shared, and must allow customers to opt out of sharing their information with third parties.
3. Limit data sharing: The act limits the sharing of non-public personal information with non-affiliated third parties, unless users are given the opportunity to opt out. 

GLBA compliance should be based on three core principles any relatable business should follow, which are financial privacy rule, the safeguards rule, and the pretexting provisions. Sure thing, we need to discuss them in detail. 

The financial privacy rule

The financial privacy rule includes a number of important practices you should adopt in your financial institution: 

• Clear privacy notices. You have to clearly notify your users about their data being collected, for what purpose, and what method is used. Also, according to the financial privacy rule, your financial institution should clearly state the rights of your customers in regards to their data sharing and usage. You have to provide this notice as soon as you collect customer data, and the message must repeat in a year, in case the customer still uses your service. 
• Opt-out right communication. It’s also crucial to leave your customers an opt-out right before their data is shared. Your financial institution should notify your customers with a relevant and timely notice, so they can make an adequate decision whether they’re ready to share their data with your site. 
• Purpose of customer data collection. You should describe the purpose of collecting your customer data and stand up to the promise not to use their data in other ways than mentioned in your purpose statement. For example, if you collect user data for analytics, you can’t sell it to advertising agencies. 
• Avoidance of account information sharing. As we’ve mentioned before, it’s prohibited to sell/share customer information to third parties such as advertisers, telemarketing agencies, and so on. 

Those are the most critical aspects of the GLBA privacy rule you should pay attention to for strict compliance with this regulation. However, it’s just the beginning, so bear with us to explore other principles. 

The safeguards rule 

The safeguards rule obliges financial organizations to adopt numerous security policies to ensure your customers can use your service safely. The safeguards rule also implies security of your sensitive financial information and improved customer experience, which is why following these practices is beneficial for your company, even though the list of to-do actions is quite long: 

• Comprehensive information security program. You must create, implement, and maintain a comprehensive security program to protect the confidentiality and integrity of customer information. 
• Qualified individual appointment. The safeguards rule requires you to appoint a separate role in your company for managing security programs for your organization. You have to ensure this person has relevant qualifications and can complete their workplace duties without serious challenges. 
• Risk identification and assessment. Regular checkups for risks and identification of their types as well as ways of their mitigation are obligatory for effective data security.   
• Control threats safeguard. Financial institutions have to regularly use and review safeguards rule measures to be able to protect customer data. Additionally, appropriate measures must be implemented to secure the applications that store, collect, and transmit customer information. 
• Safeguard measures testing and monitoring. Once safeguard measures are adopted, they require regular testing and update when necessary.  
• Staff training. You must provide security awareness training and conduct regular refresher sessions for your staff. Remember, the security of an organization is only as strong as its least vigilant employee!
• Third party service providers management. If you outsource any of your processes to third party service providers, it’s essential to check the vendor’s security practices and request to adopt safeguard measures consistent with your own data security plan.
• Incident response planning. The safeguards rule obliges financial institutions to develop an incident response plan and write scenarios for any case possible to predict, so that your team can react to the incidents according to a well-prepared guide. Still, you should analyze every single incident and record the key lessons learned for improvement of your response plans. 
• Board of directors reporting. Your employee responsible for data security must provide a written report to the board of directors or governing body on a regular basis, or at least annually. This report should include details about meeting GLBA information security requirements, its legal compliance, risk assessments, risk management, and recommended changes to safeguards rule compliance methods. 

Aaaand that’s all for the safeguards rule. Sure, it’s a big project to implement all these things in your company, but your customers and you will be grateful for such an important job done. 

The pretexting provisions 

Social engineering attacks have surged significantly in recent years, resulting in billions of dollars in global damages. The pretexting provisions aim to prevent the unauthorized access to and use of customer information through deceptive practices. To comply with GLBA requirements under this provision, financial institutions must follow these recommendations:

• Effective data access controls. To avoid social engineering attacks such as phishing and scams, you need to create and adopt data access policies that state access permission rights, role-based access, and user activity monitoring. 
• Awareness sessions for employees. Since the human factor is one of the most persistent threats for your cybersecurity, arranging regular awareness sessions for your staff is the key to reducing risks of breaches and improving their skills to safeguard sensitive data. 
• Strict authentication mechanisms. Setting strict access controls such as multi factor authentication, role-based access controls, and strict password policies are the backbone of protection from unauthorized access attempts and social engineering attacks.  

These are the three core principles of GLBA compliance. But who should follow them? 

What businesses require GLBA compliance? 

If you’re in doubt whether your company has to undergo GLBA compliance, check the image below to see what kind of companies must adhere to the policy. 

But what will happen if you fail to comply with GLBA? Let’s see the case study of Venmo. 

In 2018, Venmo, a popular peer-to-peer payment service, found itself in the center of a privacy scandal. This financial institution was accused of violating the GLBA: the primary issue was Venmo’s default privacy settings. 

By default, user transactions were public, meaning anyone could view them, including sensitive financial details. This lack of transparency exposed users’ personal information to a wider audience than intended. Additionally, Venmo was criticized for not providing clear and sufficient privacy notices to its users, failing to adequately inform them about how their data was being collected and used.

These privacy lapses led to significant consequences for Venmo and its parent company, PayPal. The Federal Trade Commission (FTC) reached a settlement that required Venmo to implement more transparent privacy settings, provide clearer privacy notices, and strengthen its data protection measures. While the exact financial penalties were not disclosed, the incident undoubtedly harmed Venmo’s reputation as a secure and privacy-conscious payment platform.

Beyond a doubt, it’s much safer to comply with the regulations not just to follow the law but to care for your customers, your own data security, and your good name. That’s why we have prepared a detailed checklist which will let you not to miss a single important aspect of compliance with GLBA.  

Main steps to comply with GLBA

1. Know your obligations. Make sure you are familiar with the GLBA document and its three core principles we’ve described above. That’s the basic requirement that aims to ensure you’re fully aware of responsibilities you must hold in the face of the law and your customers.
2. Look at your risk assessment gaps. Review your risk assessment practices and try to identify what blind spots you have in order to adopt relatable decisions. 
3. Have a custom information security program. Transform your risk assessment conclusions into an actionable plan you will follow in case of security breaches and other relatable emergencies. 
4. Use strong encryption methods. Make sure you encrypt your traffic with robust encryption methods. We suggest you try VeePN — a premium virtual private network (VPN) service that uses AES 256-bit encryption which is considered the most secure standard so far. In addition to reliable encryption, VeePN offers such security features as Double VPN, NetGuard, and Alternative ID that make this app an ideal solution for protecting your business data. 
5. Update and test security measures regularly. Review and update your information security program from time to time to address any gaps that prevent you from GLBA compliance. 
6. Focus on your first line of defense. Responsiveness of your employees is the main defense mechanism you should care for, which is why their training and education should be one of your priorities for the information security program.  
7. Create a clear process for detecting and responding to security issues. Create and rehearse narrow-specific scenarios for detecting and responding to security threats, as long as the success of your data protection activities depends much on how well and fast they’re handled by your team. 
8. Arrange regular compliance audits. Review your basic compliance activities just to be sure you don’t deviate from the GLBA compliance regulations, and in case you do, adjust your processes respectively. 
9. Manage your documentation properly. Timely documentation of every compliance step taken is the cornerstone of your successful information security program and GLBA compliance. 
10. Be at the forefront of changes in security management. Do your best to stay informed about the most recent changes in the industry and cybersecurity to be prepared for new types of hacker attacks and minimize risks of unexpected strikes with new hacking methods. 

Feel free to print this checklist out and hang it on front of your desk to have it at your fingertips. 

Enhance your data protection processes with VeePN

It is difficult to ignore the fact that data security is important not just for formal compliance with GLBA but first and foremost for the greater good of your customer information. With this checklist for GLBA compliance you can be sure you won’t miss anything important to data security of your users and your online business. 

To ensure your security program is as reliable as possible, we suggest you use VeePN that guarantees strong encryption of your data and 360-degree data protection from various online threats such as phishing, malware, and trackers. VeePN supports all major operating systems and platforms, so you can use one subscription for up to 10 different devices.

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Written by VeePN Research Lab VeePN Research Lab is dedicated to provide you latest posts about internet security and privacy.

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