The Business Case For Modernizing Cyber Regulatory Reporting Compliance in Enterprises
Banking | 5 min READ
    
What Is Cyber Regulatory Reporting Compliance?
Regulatory bodies - state, federal, regional, and international - ensure the confidentiality, safety, and integrity of sensitive data gathered by companies. These bodies establish rules that dictate how a company stores information and safeguards it from external threats. The rules help reduce frauds, hacks, and other security breaches while increasing transparency of how companies use customer data.
Sanjay Bajaj
Sanjay Bajaj

Senior Vice President

BFSI

Birlasoft

Mark Weston
Mark Weston

Investor & Founder

Regulativ.ai

 
Companies have to ensure compliance by adhering to the regulatory standards and establishing standardized cybersecurity policies. A failure to comply can lead to legal and financial ramifications. Before exploring the various cybersecurity regulations, let’s understand why they’re required in the first place.
Why Is It Crucial to Organizations in Today’s World?
As more businesses undergo digital transformation, their data and IT infrastructure become more vulnerable and exposed to cyber threats. Cybercriminals explore weaknesses in software, systems, networks, and even employees - via phishing emails or unstable public/home networks - to access sensitive information that they can hack and sell on the dark web.
In 2017, Equifax, one of the largest credit bureaus in the US, was hacked because of vulnerabilities in one of its applications, exposing the personal information of millions of customers. The incident cost Equifax over USD 4 billion. In 2020, a Twitter breach targeted 130 accounts, including former US presidents and influential tech leaders. The hackers stole USD 121,000 in Bitcoin.
Stay Ahead
Visit our Banking page
As the world fast-tracked its digital adoption due to a raging pandemic in 2020, the number of weak links in the form of mobile and IoT devices, rose, making companies more prone to cyberattacks. Moreover, over 25% of data breaches take months to get discovered and dealt with, according to the 2020 Data Breach Investigations Report.
The Equifax breach happened sometime between May and July 2017, was detected towards the end of July and made public only in September. Organizations spend months, and sometimes years, to detect a breach and then deal with the aftermath.
That’s why cybersecurity standards must evolve hand-in-hand with advances in technology to ensure data security and to detect and deal with cyber threats swiftly. Several regulatory bodies have implemented numerous regulations for data security and privacy to help companies protect sensitive data and safeguard their customers from cyberattacks.
Such regulations hold companies legally accountable for any security breach and prompt them to establish cybersecurity policies and procedures. For instance, the 23 NYCRR 500, a state regulation in New York, imposes fines of USD 250,000 or 1% of total banking assets for non-compliance.
Let’s look at getting started with cyber regulatory reporting to comply with security-related regulations.
Cyber Regulatory Reporting Requirements 101
The first step is to identify and understand the types of data your organization gathers about your customers. If you collect social security numbers, then that’s PII (Personally Identifiable Information), or if you collect credit card information, then that’s sensitive financial data. Knowing the types of data and their degrees of sensitivity helps dictate the cybersecurity framework to be set up to prevent breaches and protect the quality, integrity, and security of customer data.
The next step is to appoint a dedicated CISO (Chief Information Security Officer) or a DPO (Data Protection Officer) responsible for company-wide cybersecurity and compliance. This person would help the organization:
  • Handle cybersecurity risk assessments
  • Establish standardized policies and procedures to safeguard all dat
  • Provide security and compliance-related training
  • Review, optimize, and update all cybersecurity programs
  • Ensure submission of compliance-related forms, certifications, and reporting to the relevant authorities
The A-Z of Cybersecurity Compliance Frameworks
These steps help companies improve their documentation and consequently, increase operational efficiency while reducing costs. Proper documentation and standardized processes help weed out redundant information and inefficient practices.
They also aid in establishing sound cybersecurity programs that remove vulnerabilities and comply with local, regional, and global data protection laws and regulations.
Examples of Cyber Regulatory Mandates from Regulatory Bodies
Role of a CISO in an enterprise

Click to zoom in

Examples of Cyber Regulatory Mandates from Regulatory Bodies
While it’s crucial to understand the data gathered, it’s equally important to know which regulations apply to your organization. Let’s look at some key regulations on data protection and privacy.
  • SOX (Sarbanes-Oxley Act): SOX is a mandatory US federal law passed in 2002 for public companies to reduce corporate fraud and improve transparency, and was updated in 2016 to encompass cybersecurity.
  • PCI-DSS (Payment Card Industry Data Security Standard): PCI-DSS is regulation for companies handling credit card information. It specifies guidelines on encryption, access control, and measures to tackle cyber threats.
  • 23 NYCRR 500 (New York Codes, Rules, and Regulations from the New York State Department of Financial Services or NYDFS): This is a regulation for financial institutions operating in New York, which expects firms to run regular risk assessments, maintain detailed audit trails, have cybersecurity policies in place and a response plan for potential breaches.
  • HIPAA (Health Insurance Portability and Accountability Act): Passed in 1996, HIPAA is a federal law that regulates the personal health information gathered by the healthcare industry in the US.
  • GDPR (General Data Protection Regulation): The GDPR applies to all companies operating in the EU or handling data of European citizens.
  • GLBA (Gramm-Leach-Bliley Act): This is an IT security and privacy law applicable to financial institutions in the US, requiring them to explain their information-sharing practices. It requires rapid reporting of data breaches (within 72 hours) and issues hefty fines (up to 4% of annual global sales) for non-compliance.
  • CCPA (California Consumer Privacy Act): The CCPA is a state law that applies to all businesses (including nonprofits) operating in California that collect the personal information of their consumers. It expects companies to comply with CCPA within 30 days of getting notified about a violation (data theft or a security breach).
Organizations must abide by the regulations applicable to the type of data they handle and the regions they operate.
Meeting regulatory compliance can seem daunting, but it’s critical for cybersecurity, maintaining an organization’s reputation, and building brand loyalty among its consumers. Robust cybersecurity policies protect a company’s IPR (intellectual property rights), code, and other confidential data that provides the edge needed to stay ahead of the competition.
As digitization becomes crucial for businesses to survive, the number of regulatory standards will keep growing. That’s why understanding and complying with regulations, appointing a team headed by a cybersecurity expert (like a CISO, DPO, or an external consulting firm), performing frequent risk assessments, and constantly updating cybersecurity measures will be essential to drive business growth.
 
 
Was this article helpful?
Recommended