What does effective data loss prevention for financial services look like?
We’ve talked before on the blog about how quickly businesses can establish a solid backup strategy. For financial services, though, a standard setup isn’t going to cut it. When you’re handling sensitive financial information day in and day out, your data security needs to be as robust as a bank vault – yet flexible enough to keep business flowing smoothly.
How exactly do you achieve that, though?
Why Financial Firms Are Such Juicy Targets
The average financial service firm in Yorkshire handles data from hundreds or even thousands of clients, not to mention their own staff and third-party providers. That’s a goldmine of sensitive information just waiting to be exploited.
Cybercriminals might go after:
- Debit and credit card information
- National Insurance numbers
- Passport and driving licence details
- Physical and email addresses
- Investment portfolios and financial planning documents
All of this information can be sold on the dark web, used to commit identity theft, or leveraged in sophisticated fraud schemes. For cybercriminals, targeting financial services firms offers high rewards with relatively low effort – especially when those firms haven’t prioritised data loss prevention.
What Could a Data Breach Mean for Your Financial Institution?
The financial impact of data breaches is pretty staggering to think about. IBM’s 2024 Cost of a Data Breach Report revealed that financial services continue to experience the highest cost per breach out of UK industries, reaching an average of £6.05 million last year.
While small businesses might not face such astonishing figures, it’s important to note that even losing a few thousand pounds after a breach can severely impact local organisations. And then there are the costs that are harder to quantify.
Put Yourself in Your Customers’ Shoes
Say you’re a business owner looking for financial advisory services.
You’ve narrowed it down to two possible firms. Both offer similar services at comparable rates. One’s been operating for just five years, while the other has a decades-long reputation (and extensive experience working with your industry).
You’ve basically made up your mind – until a bit of internet sleuthing reveals that the more established firm experienced a data breach a few years ago. Enough time has passed that they’ve probably patched up their weak spots, but when you’re looking for a team to trust with something as sensitive as your finances, are you really going to take the risk?
Shouldn’t Data Security for Financial Services Be a Top Priority for Firms?
You’d think so – but between 2022 and 2023, 20.4 million Brits’ data was compromised in cyber-attacks on financial services. The UK saw 358 reported instances of what the ICO deems ‘cyber incidents’ in 2024. At the end of Q1 2025, we’ve already added another 109 to that list.
Naturally, you’d expect major institutions like Barclays or HSBC to have robust systems in place. The family-run accounting firm on the high street, however, might not have the knowledge or capacity to keep abreast of today’s endlessly evolving cyber threats in-house.
Potential customers won’t assume that, though. They place their data in your hands with as much faith as they’d give those larger institutions, and it’s your job not to let them down. For small and medium-sized businesses, this is where specialised financial services IT support in Yorkshire becomes a must.
Three Big Data Security Mistakes Your Firm’s Probably Making Right Now
- Relying on Cloud Storage as a Complete Backup Solution
Many financial firms assume that storing files in OneDrive or SharePoint means they’re fully protected. So many, in fact, we dedicated a whole blog post to debunking this common misconception.
Sadly, cloud storage doesn’t equal true backup. If files are accidentally deleted, corrupted, or encrypted by ransomware, those changes sync to the cloud too. Financial data security best practices require proper, immutable backups that can’t be altered or deleted.
- Failing to Properly Vet Third-Party Vendors
Outsourcing to third parties without implementing proper data loss prevention techniques for financial services creates significant vulnerabilities.
Remember that your data security is only as strong as your weakest link. When third parties can access your systems or data, their security practices become yours too – so make sure you’re inheriting something solid.
- Neglecting Employee Security Training
While technical controls are essential, human error remains one of the primary causes of data breaches. Plenty of businesses invest heavily in technology while neglecting to train staff on security awareness, spotting phishing attempts, or handling sensitive information appropriately.
Your business wouldn’t be the first to fall into these bad data security habits. Since you’re reading this, though, you are going to be one of the few that makes an effort to break them.
Top Data Loss Prevention Tips for Financial Services
Move forward by implementing these key data security tips for financial services:
DIY Measures (limited technical knowledge needed)
- Introduce Strong Password Policies: Require complex passwords that change regularly and implement multi-factor authentication across all systems.
- Classify Your Data: Identify what information is most sensitive and requires the highest levels of protection.
- Create Clear Data Handling Procedures: Document how different types of data should be stored, transmitted, and disposed of.
- Run Regular Staff Training: Schedule quarterly security awareness sessions focusing on current threats and proper data handling.
- Use Encrypted Communication Channels: Ensure all client communications containing sensitive information use encrypted email or secure client portals.
Expert-Level Protection (enlist IT support for effective implementation)
- Deploy Data Loss Prevention (DLP) Solutions: These tools can automatically identify sensitive information and prevent it from leaving your network without authorisation.
- Implement Endpoint Protection: Ensure all devices with access to financial data have advanced security software that can detect and block sophisticated threats.
- Conduct Regular Security Audits: Have professional IT support for financial services in Yorkshire perform thorough assessments of your security posture at least annually.
- Establish Comprehensive Backup Protocols: Implement the 3-2-1 backup rule: three copies of data, on two different media types, with one copy stored off-site.
- Create an Incident Response Plan: Develop clear procedures for detecting, responding to, and recovering from security incidents.
Financial Data Security Best Practices: What the Regulations Say
Financial services firms operate under some of the strictest regulatory frameworks when it comes to data protection:
GDPR requires appropriate technical and organisational measures to ensure data security, with potential fines of up to €20 million or 4% of annual turnover for violations.
PCI DSS mandates specific controls for handling payment card information, including encryption, access controls, and regular security testing.
FCA Regulations require financial firms to have systems and controls in place to identify and prevent data security risks.
The common thread across all these regulations? They emphasise the need for durable security controls, regular testing, employee training, and documented policies for handling sensitive data.
They all recognise that data security for financial services isn’t a one-time implementation but an ongoing process requiring vigilance and adaptation. It’s not something you can set and forget – it’s a cornerstone of successful business strategy that’s best supported by experienced professionals.
Protect What Matters Most: Your Data, Your Reputation, Your Business
Whether you’re a small accounting practice or a mid-sized wealth management firm, the principles of strong data protection remain the same. At Singularitee, we can help ensure you’re following all of them.
We’re dedicated to supporting your IT systems so you can be dedicated to running your business – and we do it all for a fixed monthly fee.
To learn more about our services and lock down your firm’s sensitive data, book a call with Jenna today.
