The Future of Finance: Secure File Sharing for Financial Services

Transferring sensitive, confidential, and personal information is a widespread practice in everyday operations at financial services. The move towards increasingly online services for speed and ease of use has created new challenges surrounding securing financial data. Secure file sharing for financial services is an essential consideration for any financial institution that is currently shifting to or has already shifted to online services.

If a data breach should occur, there are significant consequences for businesses within financial services, both in terms of financial losses and damage to reputation. There is a continually rising trend of data breaches at financial institutions, including banks globally, affecting both customers and businesses. A recent cybersecurity breach at the Bank of America exposed the personal information of 57,000 customers. The cost of this breach has not yet been disclosed, but the average data breach costs upwards of $4.45 million USD.

Outdated processes and technologies open the door to vulnerabilities — meaning that financial institutions that invest time and effort into secure file transfer solutions will significantly minimize risk.

With all this in mind, what is the best option to consider for secure file-sharing for financial services?

Using A Virtual Data Room for Secure File Sharing for Financial Services

A virtual data room, such as the Extranet User Manager Data Room, is a secure platform trusted for storing and sharing confidential information. Platform access can be configured to allow authorized users such as employees, clients, and other individuals who require access to view, share, and request documents for remote collaboration.

This is particularly useful for banking and investment institutions looking to request client information and share secure documents for review and signing. Whether it be a secure memo or a form with personal information, keeping it within a data room will prevent unauthorized users from accessing it. At the same time, it simplifies internal processes by allowing all authorized employees to access documentation when required. Instead of waiting for documentation to be sent by email, documents are stored securely and accessible to all internal employees with access.

Benefits of Using a Data Room in the Financial Sector

A data room benefits the financial sector by providing a secure platform for sharing confidential financial documents, such as investment proposals, merger and acquisition (M&A) documents, loan agreements, financial reports, and personal banking information. It ensures that sensitive financial information is protected from unauthorized access and cybersecurity threats. Additionally, it streamlines document management processes, facilitates collaboration between stakeholders, and enhances regulatory compliance efforts.

1. Increased Security

A virtual data room provides financial institutions with a secure platform to share, receive, and view client information without the risk of data breaches. With the highly confidential data that is shared daily in the financial services sector, it is essential that companies and customers can rely on the system they are trusting to protect their data.

2. Customer Demand for Secure Transfer Methods

Banking customers are increasingly looking for secure methods to transfer sensitive financial information. With the growing awareness of cybersecurity threats and data breaches, customers expect their financial institutions to prioritize security when managing their confidential data. With the rise in data breaches taking place at financial institutions globally, customers are now hesitant to engage in financial services with organizations that are not taking the necessary steps to safeguard them. Secure file sharing for financial services, such as data rooms, helps instill trust and confidence among banking customers, whether they are retail customers or large businesses.

3. Regulatory Compliance

Regulatory compliance is a critical aspect of the financial sector, and secure file transferring is essential to meet regulatory requirements. Financial institutions are subject to strict regulations regarding the handling and protection of customer data, such as the Gramm-Leach-Bliley Act (GLBA) in the United States and the General Data Protection Regulation (GDPR) in the European Union. Implementing secure file-transferring methods like data rooms helps financial institutions comply with these regulations and avoid costly penalties.

4. Requirement for International Banking

Secure file transfer is particularly important for international banking operations. International transactions involve the exchange of sensitive financial information across borders, making them vulnerable to cyber threats and data breaches. Implementing secure file transfer methods ensures the confidentiality, integrity, and authenticity of financial data, regardless of geographical boundaries, thus supporting the smooth operation of international banking activities.

5. Productivity Boost

Data rooms boost productivity in the financial sector by streamlining document management processes, enhancing collaboration among teams and stakeholders, and reducing the time and effort required for document exchange. With features such as simplified interfaces, easy document upload and tagging, and centralized document tracking, data rooms enable financial professionals to access, share, and manage documents more efficiently, improving overall productivity and operational effectiveness.

How Financial Services Use Secure File Sharing

Financial institutions such as banks and investment firms use secure file sharing daily to safeguard secure information, increase operational efficiency, and prevent added costs associated with data breaches. Common uses for secure file sharing for financial services are:

• Mergers and acquisitions due diligence
  • A virtual data room provides a secure platform for all authorized parties to access, review, and sign documentation
• Client document management
  • Clients and employees can use the virtual data room to communicate and share sensitive information that is necessary for financial services
• Internal document storage and collaboration
  • The virtual data room will store all documentation for authorized employee access and compliance regulations
• Loan syndication
  • During loan syndication, a virtual data room can be used as a secure platform for all parties to compile and share documentation needed for the loan