|The Gramm-Leach-Bliley Act (GLBA), which took effect July 1, 2001, ushered in sweeping changes for the financial services industry. Along with enabling new types of financial services for consumers, the act requires institutions to develop extensive administrative, physical and technical safeguards to secure the confidentiality of customer records and information.
Also known as the Financial Modernization Act, GLBA requires banks, insurance companies, brokerages and other financial institutions to establish administrative, technological and physical safeguards to ensure the confidentiality and integrity of customer records and information. In order to comply with this federal mandate, financial institutions are required to identify and assess security risks, plan and implement security solutions to protect sensitive information, and establish measures to monitor and manage security systems.
Safeguarding the confidentiality and integrity of customer information is no longer a best practice for financial institutions. It is a legal requirement.