Gramm-Leach-Bliley Act: What it means for banks and financial institutions

FINANCIAL PRIVACY RULE: It’s usually known as the Privacy Rule, where it regulates how the organizations collect and protect the private financial data of the customers. It sets certain standards on which data should be collected, how it will be collected, used, and shared. The organization must provide a notice of the privacy policy at the beginning of the client’s relationship with the firm. Customers are also prompted to get an annual notice throughout the duration of their association with the organization.

SAFEGUARDS RULE: This component requires the institutions to set up their own comprehensive security programs to protect their customer data. This rule requires them to designate at least one person to oversee all the aspects of an information security plan, such as development and regular testing. It also requires establishing administrative, physical, and technical protections against cyberattacks, phishing schemes, and other cybersecurity risks.

PRETEXTING RULE: This rule forbids any act of fraudulent means by employees or business partners to access or utilize the customer’s information. GLBA doesn’t have a specific qualification regarding this rule. However, this entails training employees to avoid pretexting in the scenarios of written information security documents.