Under the Financial Modernization Act of 1999, all financial institutions must take steps to safeguard consumers’ finances and personal data. It governs how institutions like auto lenders can collect, hold, and disclose customers’ information. But as the public becomes increasingly finance-savvy, lenders must further tighten their protective measures.
CARS Protection Plus reports that the rise of digital car buying and financing has left auto lenders with some unique security risks. The following details how and why the most successful lending institutions take cybersecurity more seriously than ever before.
Why Should Auto Lenders Protect Car Buyers’ Data?
Digital security and safeguarding should be at the forefront of every auto lender’s mind when considering any virtual change. All staff should be involved in the process and constantly reminded of the protocols (i.e., ensuring two-factor authentication is turned on, lockout times aren’t extended, and nobody writes passwords down for the world to see) for many reasons, including:
- Pandemic boosted consumers’ financial fluency — The COVID-19 pandemic changed the way consumers behave and think financially. Since they’re more economically minded, auto lenders need to ensure strong cybersecurity to stay successful.
- Establishing and maintaining trust with new and current buyers — Customers aren’t afraid to go elsewhere if they feel their current lender isn’t up to scratch. So, institutions should look to strengthen their security belts to keep current borrowers and attract new ones.
- Adhering to federal regulations — The Federal Trade Commission outlines various principles all financial institutions must follow. To avoid closing their doors permanently, lenders need to be mindful of the ever-changing economic laws.
How Auto Lenders Protect Car Buyers’ Data
Lending organizations are taking various steps to protect themselves and their buyers’ data from cyberattacks and breaches, such as:
#1 Ensuring Up-to-Date Software and Systems
Digital attacks often occur because systems or software aren’t completely updated. Hackers take advantage of the vulnerabilities to access networks and steal data. And sadly, once they’re in, it’s too late.
Many institutions are investing in patch management systems to mitigate these risks.
#2 Tapping into Artificial Intelligence
While AI is one of the most at-risk tools, it’s also the best at preventing attacks and securing data. Companies don’t need humans to monitor firewall logs. Instead, AIs do it for them.
#3 Deleting Unnecessary Data
Auto lenders wipe old data (i.e., information over seven years old) from their systems. Major attacks occur when lots of data is sat around unprotected. So, deleting it is vital.
#4 Strengthening System Access Control
Cybercriminals are known to enter business premises with a USB containing infected files, slotting it into the first computer they find, and damaging the entire system. Financial institutions combat this by installing perimeter security systems.
#5 Implementing Endpoint Protection
Endpoint protection safeguards remote devices like tablets, laptops, and cellphones connected to a lender’s network. It reduces the risk of somebody attacking the wireless network and stealing data.
The Importance of Protecting Consumers’ Financial Privacy Isn’t Going Away
Cybersecurity is a global issue. It isn’t going away. In fact, it’s likely to get worse as the world shifts into an even more digitally inclined space. Therefore, auto lenders implement the five strategies above to remain on consumers’ recommendation lists.