In 1999, Congress passed the Gramm-Leach-Bliley Act, which requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. The Act mandated the passage of the Safeguards Rule, which was promulgated by the Federal Trade Commission (FTC) in May 2002 and made effective May 2003. In 2019, the FTC began working on amendments to the Safeguards Rule, and on December 9, 2021, the FTC finalized these amendments. Depending on the classification of their financial institution, clients will need to understand the following rule changes and properly abide by the new FTC regulations.
As online and at-home banking options become more accessible, more online activity increases the risk of theft. Since 2021, IBM reported that the average cost of a breach rose from $4.24 million to $4.35 million.