Indian BFSI Sector needs to be prepared for upcoming data protection laws

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The increase in financial crimes is not only a threat to BFSI (Banking, Financial Services and Insurance) companies but it also touches the daily life of millions of people across the globe. According to a recent study, only 1% of the $2.4 trillion laundered through international financial systems is believed to be confiscated. According to another study released by Thomson Reuters, the estimated cost of financial crime globally is $1.45 trillion — 3.5% of the turnover globally. In India alone, about 53% corporations have been a victim of financial crime in the past one year.

Financial crimes affect nation in endless ways like human trafficking, prostitution and child labour. It can many a times lead to terrorism. Terrorists are smart enough to hire bankers, accountants and lawyers to keep their funds hidden and fluid within the system. To counter this threat, the Financial Action Task Force, an inter-governmental body, responsible for setting global standards on anti-money laundering (AML) and combating the financing of terrorism (CFT) was formed.

Big data, machine learning and Artificial Intelligence are the key to prevent financial crimes and stay protected. Deeper data analytics and modern technology can help keep the financial records secure. Amidst such high risk of financial crimes, in April, Reserve Bank of India (RBI) has asked all the payment services firms to provide an in depth record of effort taken by them to keep the customer records safe and secure in the servers within the nation. It is of utmost importance for BFSI businesses to select data storage vendors smartly who can assure full data protection.

India doesn’t have any data protection laws until now. The Ministry of Electronics and Information Technology (MeitY) had appointed an expert panel headed by former SC judge BN Srikrishna to draft a data protection law last August. The team is created to build laws to protect data of Indian citizens while we use global online services. They will be establishing boundaries to for data being transferred to foreign servers and ensure its safety within the nation. It may be similar to GDPR law presented to Europe for its data protection.

“India has accelerated from a ‘bail gaadi’ economy to a silicon-chip economy,” Srikrishna told Bloomberg. “But privacy and data regulation rules are still far behind.” That’s why the panel intends India to be as hands-on as possible in the data privacy of its citizens. “Like we keep diabetes and blood pressure in check, controls are needed for data,” Srikrishna says. “Companies like Amazon, Google, Microsoft, and Flipkart are extremely nervous.” They are to release their first draft of data protection laws this week.

Indian BFSI companies need to make smart choices of vendors with perfect infrastructure to store their sensitive data within the nation. Logix Infosecurity being into data security domain since last 18 years is helping clients with Data Storage maintaining appropriate protection standards and assuring data safety.

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