Why Gramm-Leach-Bliley Act (GLBA) Compliance Is More Important than Ever

The Gramm-Leach-Bliley Act (GLBA) enforces strict regulations to safeguard financial information. GLBA compliance is a critical requirement for financial institutions and industries managing sensitive consumer data in the U.S.

In this blog, we explore the 2021 update to GLBA and what you need to do to ensure your data is compliant.

What is the Gramm-Leach-Bliley Act (GLBA)?

Back in 1999, the Gramm-Leach-Bliley Act (GLBA), also known as the Financial Modernization Act, opened new markets for financial institutions by allowing them to consolidate and offer any combination of investment banking, commercial banking, and insurance services to consumers.

Additional details on GLBA are available from the Federal Trade Commission.

Key Sections of GLBA

• The Financial Privacy Rule: Governs how private financial information is collected and disclosed.
• The Safeguards Rule: Outlines processes for securing consumer financial data against breaches and unauthorized access.
• The Pretexting Rule: Prohibits obtaining financial information through deception, ensuring consumer trust.

The GLBA also requires financial institutions to give customers written privacy policy notices that detail their information-sharing practices.

Why Is GLBA Compliance Important?

Organizations in industries including financial services, insurance, and retail must ensure GLBA compliance due to its amended 2021 regulations, which introduced stricter requirements for protecting non-public consumer data. Non-compliance can lead to severe penalties, including:

• Fines of up to $100,000 for institutions per violation.
• Fines of up to $10,000 and imprisonment for officers and directors.
• Damage to consumer trust and organizational reputation.

Who Needs to Ensure GLBA Compliance?

Some examples of industries that must be in compliance with the GLBA include:

• Financial Institutions: Banks, credit unions, brokerage firms, credit reporting companies, and hedge funds.
• Insurance Providers: Companies safeguarding sensitive client data.
• Retailers: Businesses offering credit cards or financing options.
• Higher Education: Institutions receiving Title IV funds.

Why Industries Outside of Financial Services Need to Comply

A 2021 amendment to the Gramm-Leach-Bliley Act broadened the definition of financial institutions to encompass not only financial services and insurance, but also retail, higher education, and other industries that extend credit or loans. In addition to the existing regulations, stricter rules were put in place for protecting sensitive data.

GLBA Compliance Requirements

Organizations that process consumer financial data had a December 9, 2022 deadline to comply with specific data security practices outlined by the GLBA Safeguards Rule including:

• Periodic reports to boards of directors and governing bodies.
• Secure software development practices.
• Identify and manage data based on risk.
• Implement and review data access controls.
• Encrypt data both in transit and at rest.
• Establish secure procedures for disposing data.

How Perforce Delphix Makes GLBA Compliance Easier

Perforce Delphix Continuous Compliance gives organizations the tools they need to stay in full global compliance with GLBA, the 2021 amendments, and the revised Safeguards Rule.

Protecting your non-production data should be top of the list to get in compliance, since non-production data stores used for test data management, reporting, and analytics contain up to 80% of an enterprise’s personal data, according to Delphix customers. These test environments can represent the single largest source of GLBA risk. Non-production data environments are 4-5 times larger than production and often much less secure.

The 2024 State of Data Compliance and Security Report

86% of organizations allow data compliance exceptions in non-production environments. Find out why that’s a problem and how your organization can do better in The 2024 State of Data Compliance and Security Report.

Get the Data Compliance Report

Ensure Data Privacy for GLBA

Delphix Continuous Compliance provides an API-first data platform that enables software development and testing teams to find and mask sensitive data for compliance with privacy regulations such as the GLBA.

Relevant Continuous Compliance features include:

• Automatic discovery of PII and other sensitive data.
• Irreversible static data masking that ensures data cannot be restored to its original, sensitive version.
• Referential integrity of masked data across sources and clouds.
• Identification and assessment of GLBA risks through data discovery.

With Delphix Continuous Compliance, security teams can report on how data is being processed and shared by finding where the sensitive consumer data exists in non-production environments.

Delphix enables security teams to create enterprise-level masking policies for GLBA that define what data should be masked, where, and how. Users can then consistently deploy those policies across different data sources and locations.

Since Continuous Compliance enables security teams to mask out PII and other sensitive data subject to GLBA in the development pipeline, the need to expunge anything in those lower environments is eliminated. With robust data masking, the data simply cannot be traced back to an individual consumer, with the data being made completely blind and desensitized.

Continuous Compliance takes compliance one step further by irreversibly masking consumer data in test data management environments, ensuring the data is anonymized across all databases through referential integrity.

Unlike traditional solutions which take months to implement, Continuous Compliance can be implemented in days, so you can comply faster with regulations like GLBA.

With Delphix Continuous Compliance, financial services, retail, insurance, and higher education organizations can help ensure compliance with GLBA’s strict definition for protecting consumers’ data.

Get Started

See how Delphix enables fast, automated compliance. Request a no-pressure compliance demo today. You’ll find out why industry leaders choose Delphix to mitigate data risks and accelerate innovation.

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Need more information first? Download the GLBA solution brief for more information on how Delphix can help with data compliance for GLBA.