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Carol Byrne | 16 January, 2024

The Gramm-Leach-Bliley Act: why compliance is crucial when it comes to customer data

As digitization has taken over every facet of modern finances, protecting sensitive customer data is more crucial than ever. Not just for the sake of your customers, but for the sake of your business, brand and reputation.

The Gramm-Leach-Bliley Act stands at the forefront of financial regulations to protect sensitive customer data. Any breach of the regulation can lead to significant fines and permanent damage to your brand as a result.

In this article, we cover the specifics of the Gramm-Leach-Bliley Act and the importance of a modern platform when it comes to the peace of mind of data compliance. 

What is the Gramm-Leach-Bliley Act?

The Gramm-Leach-Bliley Act (GLBA) protects sensitive customer data while in the hands of financial institutions. It focuses on the security of non-public personal information, how it may be collected and disclosed, and its protection from false pretenses. The act is separated into three main sections that outline the compliance requirements for financial institutions.

  • Privacy rule - Sets strict guidelines on the management of nonpublic customer data. This prevents the disclosure of data to non-affiliated third parties and makes it a requirement for institutions to inform customers of their privacy policies.
  • Safeguards rule - Requirements for the administrative, technical and physical security of customer data. This includes customer confidentiality, data encryption and sufficient protections from external security threats.
  • Pretexting rule - Protects customer data from internal employees or partners that may use it under false pretexts either intentionally or unintentionally.

Why you need to comply with the GLBA

Mismanagement of your customer data in context with one or more of the rules of the GLBA can lead to disastrous outcomes for your business.

The FTC and surrounding authorities can bring enforcement actions that range from rescission and reformation of contracts to monetary fines and refunds to affected customers. Civil monetary penalties can range from USD 5,000 to USD 1 million per day of violation.

One of the most damaging consequences of breaching the GLBA is a public notification of the violation. This can permanently damage your reputation and brand as a financial institution, highlighting the need for a thorough and compliant data management system. 

How to guarantee the security and privacy of your customer data

Breaches of the GLBA can often be linked to the use of legacy systems that lack the proper security and privacy integrations to manage your customer data compliantly. As a solution, configurable platforms host and integrate with a number of systems to keep data secure and private at each step of the collections process.

Single Source of Truth

Configurable platforms operate on a foundation of centralized data known as a Single Source of Truth (SSoT). This system collects, organizes and manages all data in a single place where surrounding systems have access when they need it. This avoids the risk of storing data in the wrong place, which can potentially lead to a breach of the GLBA’s privacy and safeguarding rules.

Real-time data management

Having time between recording and storing data can lead to complications and inaccuracies with separate systems. This can lead to the sharing of potentially sensitive data that breaches the privacy and pretexting rules of the GLBA.

With configurable platforms, data is stored as it is recorded via real-time data-flows to necessary systems. Not only does this ensure compliance with customer data privacy, but also guarantees it’s safeguarded in the right place with proper security at the moment of receiving it.

Ensure compliance with the GLBA at C&R Software

The Gramm-Leach-Bliley Act is designed to protect customers and their data throughout the collections process. As a financial institution, it is your responsibility to be compliant with the regulation and provide your customers with peace of mind when it comes to their data.

At C&R Software, we hold data security as one of our key priorities. Our industry leading Debt Manager platform comes with centralized data systems and real-time data flows that maintain data security and privacy at each step of the customer journey. The result is guaranteed GLBA compliance so you can safely support your customers to financial stability.

To find out more about Debt Manager and how it can enhance your data management, contact a member of our team today.

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