April 14, 2025

7 Reasons Why Better Employee Data Security Training is Essential in Financial Services

It’s tax season, a time when individuals entrust their financial institutions with a vast amount of personal information. Proper data security training for employees is key to helping protect customer data. Financial institutions – including accounting firms, banks, and investment firms – are prime targets for data thieves because of the sensitive nature of the data they collect.

It’s important that financial institutions create a total security culture, which includes a focus on data security, to help mitigate risk. By embedding data security awareness into daily operations, they can empower all employees, not just those working in IT, to act as the first line of defense against data breaches.

What is a Total Security Culture?

A robust total security culture extends beyond mere awareness. It cultivates an environment where employees consistently make decisions aligned with security policies and apply best practices. This includes ensuring staff comprehend security risks and mitigation strategies, implement and enforce safe operational procedures, and integrate knowledge and action in daily tasks.

While investing in workforce training may seem costly, the real world consequences of a data breach – including regulatory fines, reputational damage, and financial losses – far outweigh the expense.

How Employee Training Protects Data

Data Breach Prevention

The financial sector is a huge target for criminals looking for confidential data, and employees play a critical role in helping to prevent breaches. According to IBM research, information from financial firms was breached 65% more than the average organization. A well-trained staff can help hinder these attacks by understanding security risks and following company data security policies and protocols.

Compliance is Dependent on Proper Training

The financial sector is heavily regulated, and privacy laws are constantly being updated and improved. Employees should be trained on these laws, such as the Gramm-Leach-Bliley Act (GLBA). Without proper training, employees may unintentionally violate these laws, potentially exposing their organizations to penalties and liability.

Protect Against Phishing Scams

In 2024, IBM's Cost of a Data Breach report found that phishing accounts for 15% of all breaches, making it the most common method. Unsurprisingly, a majority (71%) of organizations experienced at least one successful phishing attack in 2023, according to ProofPoint.

Educating employees on phishing, business email compromise (BEC), and other social engineering based attacks will protect individuals – and organizations. Training should be practical and teach how to recognize phishing scams and avoid downloading and executing unknown applications.

Carelessness on the Job

Employees who don’t follow proper policies and procedures are one of the biggest data security threats to an organization. According to the Cost of a Data Breach Report 2024, almost one in four breaches was due to employee error, negligence, or poor judgment . Employee training should teach data security-driven work habits. For example, do not share passwords, retain sensitive information unnecessarily, use public Wi-Fi to conduct business, or drop confidential documents into recycling.

Secure Document Management

All documents should have a recommended retention period, determined by both their business need and any legal or regulatory requirements. Employees should follow document retention schedules to help keep offices free of clutter and to contribute to the protection of data. To build and enforce compliance, train employees so they know when documents should be securely destroyed through strategies including the following:

• Publishing and communicating a company policy on records retention and destruction to define the organization’s requirements.
• Providing a checklist of retention periods for common types of documents or data.
• Conducting training courses with all relevant workforce members (or key leaders) to educate, build awareness of requirements, and clearly describe why this is important.
• Reinforce these key learnings through periodic communications (company-wide emails, intranet blog posts, presentations at townhall meetings, etc.).

Identify Data Security Risks

A business office can create many potential risks to information security that could easily go unnoticed. Employees should be trained on how to identify and avoid data risks around the office such as papers left at printer stations, unlocked cabinets, and confidential documents thrown away in trash and recycling bins.

Prevent Insider Threats

In the financial sector, 31% of the reported breaches are the result of insider activity, according to Verizon’s 2024 Data Breach Investigations Report. Good training on following policies such as a clean desk policy and shred-it-all policyin the organization can help protect documents from malicious insiders.

Start Protecting Your Business

Shred-it^®’s secure document and hard drive* destruction services can help financial institutions strengthen their data security measures. Learn how our comprehensive information protection training and compliance program can support your employee education efforts.

^{*Contact Shred-it® for service availability.}

^{**This article is for general information purposes only and should not be construed as legal advice on any specific facts or circumstances.}