How to keep financial records secure

Every business generates financial records, but the biggest concern is how to keep them secure and accurate. Financial security is an issue that all businesses must take seriously in today’s ever-evolving digital landscape. With the prevalence of cyber threats and financial fraud, it is essential for companies to safeguard their financial records from malicious actors. Fortunately, there are several steps organisations can take to ensure the safety of their financial information. From investing in secure software systems to implementing access control policies and educating employees on financial security protocols, businesses can protect their financial data while still maintaining efficient operations. 

When financial records are stored poorly

When financial records are not stored correctly, businesses can face a variety of financial and legal issues. First and foremost, financial data is extremely valuable to cyber criminals, and without proper security measures in place, businesses leave themselves vulnerable to data breaches. Data breaches can cost companies thousands of dollars, not only from the financial loss associated with stolen financial records, but from the reputational damage that may occur after a breach is made public. Moreover, companies that do not store financial records securely may be subject to fines or other penalties from regulatory agencies, depending on the severity of their lapses in security protocols.

In addition to financial losses due to data breaches and potential fines, businesses that fail to store financial records safely could also face increased operational costs. This could lead to slowed operations or fewer customers served as employees struggle with manual processes or outdated technology. Manual processes can often lead to inaccuracies or delays in filing financial reports. This is why Polonious encourages all their clients to store their information online, as everything can be securely accessed anytime. Mistakes associated with manual recording can result in delayed payments or inaccurate filings which could lead to further fines or penalties from government agencies or creditors.

Investing resources into robust financial security protocols is essential for any business looking to protect its finances and reputation. Not only will this help guard against malicious cyber-attacks but it will also streamline operations and reduce errors associated with manual processing of financial data. Failing to protect financial records can also lead to disruptions and interruptions to daily tasks.

Strategies to keep financial records secure

Businesses should also consider utilising multiple layers of security protocols when storing financial information. One strategy may not be enough and usually a combination of different strategies is more effective. There are quite a few approaches on how businesses can handle their financial records:

• Invest in a secure financial software system
• Utilise strong passwords and two-factor authentication
• Implement access control policies
• Regularly back up financial data
• Monitor financial transactions
• Use encryption technology

Invest in a secure financial software system

Investing in a secure financial software system is essential for any business that handles sensitive financial data. A financial software system can help protect financial records and ensure compliance with regulations such as the Payment Card Industry Data Security Standard (PCI DSS). It can also provide financial administrators with greater control over their financial information, making it easier to detect fraudulent activity or internal misuse of funds.

When selecting a financial software system, be sure to choose one that meets your specific needs and offers robust security features. Look for systems that include multi-factor authentication measures, access controls, encryption technology, monitoring tools, and regular updates. Be sure to choose a system that offers reliable customer support so you can get assistance should any security issues arise. Reliable customer support is really important as it can assist businesses to feel assured.

Utilise strong passwords and two-factor authentication

Utilising strong passwords and two-factor authentication is an important step in protecting financial records. Strong passwords should be at least 12 characters long, use a combination of uppercase, lowercase, numbers, and symbols, and must not include personal information like birthdays or family names. Two-factor authentication adds an additional layer of protection by requiring users to enter a code sent to their email address or mobile device before they can access financial records. This ensures that only authorised personnel have access to financial data. It is essential for businesses to ensure employees are aware of password security policies and understand the implications of failing to follow them.

Passwords shared with employees should be given in a way that does not risk getting misplaced or misused. They should also ensure that they do not write down passwords in places where they can be seen by others.

Implement access control policies

In addition to creating strong passwords and utilising two-factor authentication, businesses should also consider implementing access control policies. Access control policies should be tailored to each financial system and should specify the roles permitted to view financial records and the types of financial data they are allowed to access. This can help prevent unauthorised personnel from accessing financial information, which could lead to financial losses or identity theft. Employees should not leave documents open or download them in a common device they use with a third party.

Regularly back up financial data

Regularly backing up financial data and storing it securely offsite is an important step for businesses to ensure financial records can be recovered in the event of a data breach or system failure. Automated, off-site backups should be scheduled regularly to protect financial records from loss or corruption. When selecting a backup solution, look for one that offers end-to-end encryption and secure storage options such as cloud hosting.

Backing up documents in cloud storage is also preferred. Having a combination of storage options is the optimal choice for high-risk organisations. By doing this, companies can further protect financial records from unauthorised access. It is important to keep financial documents updated and review them regularly for accuracy and completeness. This can help businesses quickly identify potential financial risks and take swift corrective action.

Monitor financial transactions

Data analytics tools are a great way for businesses to detect financial crime quickly and accurately. Advanced software solutions such as AI-driven anomaly detection systems provide automated analysis of large datasets that would otherwise be difficult to review manually. These systems can flag up suspicious transactions by detecting patterns in the data that may indicate fraudulent behaviour such as unusual spending habits or repeated purchases from one account holder over a period of time. These systems also allow users to set alerts which notify them when certain thresholds have been exceeded so they can take swift action if necessary. Polonious integrates with a number of the major AI fraud detection tools where, in larger organisations, we will receive cases from these tools for investigation of anomalies.

Manual monitoring is another important step businesses should take in order to protect their financial records from fraud and financial crime. Manual reviews involve carefully scrutinising all incoming payments against a set of predetermined criteria. This can include comparing signatures, financial statements and other records to ensure that the payment was made by an authorised person. Other measures include checking for suspicious financial activity or unusual patterns in spending, and confirming whether a payment has been deposited into the correct account. As manual reviews require more time and resources than automated data analytics tools, businesses should consider using both methods in order to protect their financial records effectively.

By taking proactive steps to monitor financial transactions for suspicious activity or potential fraud, businesses can reduce the chances of financial losses due to fraudulent activities. By combining advanced data analytics tools with manual monitoring processes, businesses will be able to detect financial crimes quickly and stop them before they cause any serious damage.

Use encryption technology

Encryption technology is a great way to protect the financial records of businesses. Encryption is the process of using methods to modify messages or information so that only authorised people have access to them. It helps to ensure that data remains secure and confidential while being transmitted electronically. To encrypt financial information, businesses should use secure encryption software which scrambles the data into an unreadable format, making it impossible for hackers to access or steal data.

The encryption process requires two keys – a public key and a private key. The public key is used by senders of financial information and the private key is used by the intended recipients to decrypt the data. Businesses should ensure that their financial information is encrypted using strong algorithms such as AES (Advanced Encryption Standard) and RSA (Rivest, Shamir, Adleman). These algorithms are designed to make the encryption process more difficult for malicious users attempting to gain unauthorised access.

Encryption technology can also be used together with other security measures such as Multi-factor Authentication (MFA) which increases the layers of protection against fraud and hacking. MFA requires users to provide two or more forms of authentication (e.g., passwords, PINs, security questions) before financial information is released. With the combination of encryption and other security measures, businesses can effectively protect their financial records from unauthorised access. A lot of software, including Microsoft, have settings options where an encryption can be set. This is another way businesses can benefit.

Don’t forget

Strategies used to protect financial records need to be flexible and easy to adapt. Times change and sophisticated attacks learn how to get through great barriers. Businesses need to be risk aware and always invest in systems that follow high standards.

When it comes to safe data storage, Polonious complies with strict international standards to ensure that our clients receive the highest possible quality of service. We are ISO 9001 and ISO 27001 certified to highlight our commitment to secure and confidential information storing. If you want to learn more about how we can help your business handle fraud and sensitive matters, reach out!