Mediaboss Marketing

Customers of U.S. banks, credit-card companies and insurance companies will soon have their personal data protected more rigorously, thanks to a sweeping new set of regulations from the European Union.

The General Data Protection Regulation, which takes effect in May 2018, will force companies to be more transparent about the type of data they collect on individuals, how that data is used and when personal information is exposed in a breach.

The regulation will apply to all companies that process data on EU citizens, but observers expect some large multinational companies will adopt the rules throughout their operations, rather than try to enforce multiple sets of rules across locations. That is expected to be the case for financial institutions, which typically handle transactions from customers around the world.

From an architectural perspective, I think companies are going to assume everyone theyre dealing with is a European Union citizen, says Denyette DePierro, vice president and senior counsel of cybersecurity and payments at the American Bankers Association. The architecture of trying to keep that information properly segregated is probably more burdensome than just meeting the standard.

Companies will bear a substantial compliance burden from the new rule, commonly referred to as GDPR. It is a vast regulation that requires organizations toamong other thingsdocument cybersecurity practices, notify affected users within 72 hours of a breach and designate a data-protection officer who will supervise an organizations data-collection methods. Companies that fail to comply could face fines of as much as 4% of their global revenue.

But adopting GDPR could also present an opportunity for financial institutions to demonstrate their cybersecurity credentials and to prepare for what could be stricter cybersecurity regulation in the U.S.

An expanded version of this article appears on WSJ.com .

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Link:
New European Union financial rules to also give US consumers protection - MarketWatch