Safe and sound: How cloud-based document management supports credit union information security and compliance

Increasing compliance and security requirements across the financial services industry are, ideally, designed to provide consumers, financial institutions and governing bodies with peace of mind that sensitive data is being adequately protected and key regulations are being followed. However, the resources needed to meet these demands are also escalating and putting significant financial pressure on the industry. 

Credit unions, with their non-profit structures, bear an even heavier financial and human resource burden from compliance and security requirements than many of their profit-generating competitors such as banks and investment brokerages. This is a key area where utilizing the right cloud-based document management system, designed to meet the specific guidance from the National Credit Union Association (NCUA) and Financial Industry Regulatory Authority (FINRA)—if third-party investment partners are involved—can offer relief and reinforcement for your credit union’s internal and external stakeholders.

Cloud-based document management supports NCUA information security guidelines. The NCUA’s Interagency Guidelines Establishing Information Security Standards (NCUA Rules & Regulations, Part 748, Appendix A&B),  clearly state the Security Guidelines that credit unions must follow. At a high level they require credit unions to:

• Develop and maintain an effective information security program tailored to the complexity of its operations, and 
• Require its service providers that have access to a credit union’s information, by contract, to take appropriate steps to protect the security and confidentiality of this information. 

In addition, the guidelines state that, “Each credit union must identify and evaluate risks to its information, develop a plan to mitigate the risks, implement the plan, test the plan, and monitor the need to update the plan.”

It is clear, given the NCUA information security guidelines that credit unions need to proactively consider solutions that will allow them to efficiently meet these requirements and remain in compliance with other regulations related to how member data and institutional information is protected, shared and exchanged. Selecting a document management platform provider who can not only deliver the right technology for a seamless, secure, compliance-ready workflow and file exchange capabilities, but also acts as a proactive partner in the process, is a key component of your credit union’s information security and compliance strategy.

Cloud-based document management mitigates internal and external security risks. Your credit union’s digital document management vendor should be able to help you identify information security issues and how a cloud-based document management system can help you reduce the risks associated with them. Member-facing document exchange is just one area of focus for credit union compliance and security requirements as detailed in the NCUA’s guidelines which also, “require credit unions to implement an information security program that includes administrative, technical, and physical safeguards designed to achieve the following objectives:

• Ensure the security and confidentiality of member information. 
• Protect against any anticipated threats or hazards to the security or integrity of such information. 
• Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any member; and 
• Ensure the proper disposal of member and consumer information.”

This underscores the importance of having the right process and platform in place for securely storing and sharing information internally and to external parties. SmartVault enables credit unions to meet these guidelines with its FINRA-compliant platform with the ability to:

• Store all documents in the cloud eliminating the risks and expense associated with storing them locally on credit union servers or desk top computers.
• Set customized levels of access for each individual or entity needing access to files to perform critical functions for the credit union including staff, board members, examiners, accountants, lawyers, and investment firms, thereby preventing unauthorized access to information and protecting members and the credit union from its negative consequences. 
• Allow for tracking of changes and access to information and real time updating of files, preventing issues related to file security and integrity. 
• Facilitate the encryption of electronic member information, including while in transit and while stored in the cloud, preventing unauthorized access.

The usage of a cloud-based document management system will also help to alleviate the strain on staff related to managing the exchange of sensitive data with third parties such as during examinations or member-service interactions involving third-party providers, including third-party investment brokerages. 

For example, SmartVault’s implementation and support teams can assist credit unions in assessing the ways that cloud-based document management can be configured to create operational efficiencies and meet security and compliance needs both within the credit union and outside of it as documents are shared with members and vendors including accountants, legal firms and other third-party providers who have direct access to sensitive information. This will help your credit union directly address the Security Guideline requirements.

Cloud-based document management is a key component of credit union information security and compliance. 

The NCUA Security Guidelines provide an important framework for credit unions to identify and take action to reduce the internal and external threats related to information security and maintaining compliance with related industry regulations.

The right cloud-based document management platform provides the capabilities credit unions need to implement a plan based on the NCUA’s recommendations, including a secure file and information management system, the ability to control access to information, a portal through which documents can be exchanged with external parties, and the ability to transmit encrypted information. This allows credit unions to remain in compliance with key NCUA security and FINRA regulations while mitigating potential data security risks.