In 2021, the Federal Trade Commission's (FTC) Safeguards Rule was amended to provide more concrete guidance for businesses to ensure a minimum standard of financial protection for consumers. The new rule was updated to reflect the current technology and cybersecurity practices of today's digital landscape. Unfortunately, that meant the FTC had to impose stricter requirements, which could pose a challenge for many small to midsize businesses.
The depth and complexity of the new rule's requirements can put a strain on your company's resources. It requires a comprehensive and proactive approach to data security that involves people, processes, and technology. What's more, compliance is mandatory. You are legally obligated to comply if the new rule's scope covers your business; there's no way around it.
Intelligent Technical Solutions (ITS) is an IT service provider that helps navigate the new FTC Safeguards Rule. In this article, we'll dive into:
- Some of the main challenges Chief Technology Officers (CTOs) and IT Managers might face and
- How to overcome them to achieve compliance
Challenge 1: Conducting a complete risk assessment
The first step to comply with the rule is to conduct a risk assessment of your systems and data. This means identifying and evaluating the potential threats and vulnerabilities that could compromise the security of customer information. You also need to assess the impact and likelihood of each risk and prioritize them accordingly.
A risk assessment is not a one-time activity. It should be updated regularly to reflect changes in your business environment, such as new products, services, customers, partners, vendors, technologies, or regulations. You should also review your risk assessment after any security incident or breach.
Conducting a complete risk assessment can be challenging for several reasons:
- It requires skilled and experienced staff who can perform the analysis and provide recommendations.
- It requires a thorough inventory of all your assets, such as hardware, software, data, networks, devices, etc.
- It requires clear criteria for evaluating the severity and probability of each risk.
- It requires documentation of the findings and actions taken.
To overcome these challenges, you can use some of the following strategies:
- Hire or train qualified staff who can conduct risk assessments or outsource this task to a reputable third-party provider.
- Use automated tools or services that can help you scan your systems and data for vulnerabilities and generate reports.
- Adopt a standard framework or methodology for risk assessment, such as NIST SP 800-302 or ISO 270053.
- Document your risk assessment process and results clearly and consistently.
Challenge 2: Implement ongoing and specialized security awareness training
The second step to comply with the rule is to provide security awareness training for all your employees, especially those who handle customer information. This means educating them about the importance of data security, the policies and procedures they need to follow, the best practices they need to adopt, and the common threats they need to avoid.
Security awareness training is not a one-off event. It should be ongoing and tailored to the specific roles and responsibilities of each employee. You should also test their knowledge and behavior regularly to measure their effectiveness.
Implement ongoing and specialized security awareness training can be challenging for several reasons:
- It requires creating and updating relevant content that covers all aspects of data security.
- It requires ensuring the participation and retention of all employees across different locations and time zones.
- It requires measuring the impact and improvement of the training on employee performance and security posture.
To overcome these challenges, you can use some of the following strategies:
- Use online platforms or services that can help you create and deliver engaging and interactive content for security awareness training.
- Use gamification or incentives to motivate and reward employees for completing the training and passing the tests.
- Use metrics or feedback to evaluate the effectiveness of the training and identify areas for improvement.
Challenge 3: Monitor and log authorized and suspicious activity
The third step to comply with the rule is to monitor and log authorized and suspicious activity on your networks and systems. This means collecting and analyzing data about who accesses what information, when, where, how, and why. You also need to configure alerts and reports that can notify you of any anomalies or incidents that require your attention or response.
Monitoring and logging activity is not only a compliance requirement but also a cybersecurity best practice. It can help you detect and prevent unauthorized access, misuse, or disclosure of customer information. It can also help you investigate and resolve any security incidents or breaches.
Monitoring and logging activity can be challenging for several reasons:
- It requires implementing appropriate tools or services that can capture and store large amounts of data from various sources.
- It requires configuring alerts and reports that are relevant and actionable for your business needs.
- It requires responding to incidents in a timely and effective manner.
To overcome these challenges, you can use some of the following strategies:
- Use cloud-based or managed solutions that provide scalable and secure monitoring and logging capabilities.
- Use artificial intelligence or machine learning techniques that can help you analyze and correlate data and detect anomalies or patterns.
- Use incident response plans or teams that can help you contain and recover from any security incidents or breaches.
Need Help with FTC Safeguards Rule Compliance?
Compliance with the new FTC Safeguards Rule is not easy. It requires a comprehensive and proactive approach to data security that involves people, processes, and technology. Unfortunately, it's mandatory if you're included under its scope. That means you need to meet the requirements while navigating the main challenges like:
- Conducting a complete risk assessment of your systems and data.
- Providing ongoing and specialized security awareness training for all your employees.
- Monitoring and logging authorized and suspicious activity on your networks and systems.
Thankfully, you've read this article, which will prepare you to overcome those challenges.
ITS is dedicated to helping your organization meet its compliance goals. If you need help with meeting requirements, schedule a meeting with one of our compliance experts. Or you can check out the following resources for more info on the FTC Safeguards Rule:
- FTC Safeguards Rule: The Role of an MSP in the Compliance Process
- The Ultimate Guide to the FTC Safeguards Rule in 2023