Ensuring the Security and Privacy of Sensitive Financial and Employee Data in Integrated Systems

Many years ago, different arms of a company simply minded their own business, gathering data separately. Yet, they were supposed to be working toward the same corporate goals. Some smart folks took a closer look at that business model and decided it was not efficient.

Here's why.

Each unit used their own tools to gather data. So, there were a lot of disjointed tools that couldn't share data or work together. The result? Duplicated efforts and an uncoordinated data system. This led to huge inefficiencies and stunted growth.

That's how integrated systems entered the picture.

These systems came to harmonize data processes in different business arms, facilitating better communication and data flow. Business units can now unify their software into a cohesive infrastructure to achieve improved business outcomes. When the need arises, third-party applications are also integrated.

Cute and convenient as this solution is, however, it comes with its baggage – security and privacy risks. The interconnection that system integration brings introduces the danger of financial and employee data breaches.

So, what's the way forward? How do you maximize the benefits of system integration and, at the same time, manage its security and privacy risks? The answers are staring right at you in the following paragraphs.

What are Integrated Systems

Also known as integrated information systems (IIS) or system integration, integrated systems connect different subsystems to function as a central one. System integration involves linking separate software that don't normally communicate, making them work together as one harmonized system.

Running multiple software without integrating them reduces a company's efficiency and competitiveness. Units in a company that can have their systems integrated are human resources, finance, sales and marketing, among others.

3 Main types of Integrated Systems

System integration comes in several forms. The type(s) you adopt will depend on the needs and structure of your business. Here are three common types of integrated systems.

Enterprise Application Integration (EAI)

As a business expands, it invests in more enterprise applications to optimize its front- and back-office operations. Over time, these applications accumulate data volumes separately, having no meeting point and reducing the overall efficiency of the organization.

With enterprise application integration (EAI), different applications, systems and databases are integrated to improve the flow of data and business operations. EAI harmonizes all functions into one and ensures the automation of real-time data exchange among these applications.

Data integration

Data integration entails linking data from different sources into a unified and comprehensive dataset. The purpose of this type of integration is for data from separate sources to work together smoothly. For example, you can consolidate data from your social media accounts into a unified platform like Hubspot.

Third-party system integration

Third-party system integration involves linking the company's existing systems and applications with software developed by third-party providers or vendors. It becomes necessary if your company requires a new functionality but cannot afford custom software.

This type of integration also happens when there's an urgent need and limited time to build a new software from scratch. Examples of third-party integration are payment gateways and marketing automation software.

Third-party system integration expands the functionality of your existing infrastructure without having to develop any elaborate in-house software. It gives you access to specialized tools and services, helping to streamline your work processes.

5 Ways to Ensure the Security and Privacy of Sensitive Financial and Employee Data in Integrated Systems

After knowing the causes of security and data breaches in integrated systems, the next step is to learn how to avoid or manage these causes. Here are five ways to protect sensitive financial and employee data in integrated systems.

Secure payment gateway

Most businesses today use payment gateway providers to pay their staff and vendors. This is one of the ways financial data is exposed. Third-party systems like payment gateways have access to sensitive financial information and if such a provider does not take the proper security measures, security will be breached. To avoid this, ensure your payment gateway provider takes the necessary security measures.

Use of Data Subject Access Request (DSAR)

One of the ways to protect employee data is by letting your staff members use the data subject access request (DSAR). This request is sent by an individual to an organization to know how their information has been collected and stored. To make this process easier, invest in DSAR software to automate it.

The software is a robust solution that helps you automate and centralize subject rights request processing. It allows you to save time and effort, improve compliance with relevant bodies and build trust with stakeholders.

Tax compliance

Tax compliance not only lets you meet your legal obligations, it also allows you to protect data and privacy. Proper recordkeeping required for tax compliance helps you keep accurate and up-to-date financial records, spotting any security anomalies in the process. For example, tax compliance for token compensation lets you have your books in the right order and also opens your eyes to any security loopholes.

If you pay your employees in crypto, invest in a tax compliance platform. This platform helps you simplify token payroll by carefully considering each worker's tax-related data and compensation structure. It also examines tax rules that are specific to your employees' jurisdictions. Moreover, it offers comprehensive reporting features to facilitate seamless filing of crypto taxes and ensures compliance with evolving regulatory requirements.

But that's not the juiciest part. A tax compliance platform follows all global data and privacy laws, giving your data the protection it requires. You won't have to worry about security and privacy breaches when using the platform.

Access control

To protect sensitive financial and employee data in your integrated systems, ensure you control access to this data. Make sure only authorized employees can access confidential information. Using multi-factor authentication (MFA) also helps to add that extra layer of protection.

Data encryption

Be sure to incorporate solid encryption best practices to ensure communication is secure between integrated systems. This is necessary to protect both data in transit and those stationary from unauthorized access.

4 Benefits of Integrated Systems

When proper measures like the ones mentioned above are taken, integrated systems come with a lot of benefits. Find some of them below.

Improved efficiency

When you adopt system integration, you eliminate routine manual data entry. Data input and update are automated across various systems without human intervention. This saves time and effort and generally boosts efficiency.

Better decision-making

An effective integrated system helps to improve decision-making. This is due to real-time access to data from various sources within the organization. The continuous flow of up-to-the-minute, accurate data makes it easy for businesses to make timely and informed decisions.

Cost-effectiveness

When tasks are completed more efficiently, you save time and reduce unnecessary costs. Also, with streamlined operations, you'll need fewer employees, leading to a lean, scalable business and enhanced profits.

Reduced burnout

Constantly performing manual tasks leads to burnout. When employees routinely perform mind-numbing tasks like searching for documents and manual data entry, they burn out easily. With system integration, these repetitive tasks are automated. Employees can now perform more meaningful tasks that give them a sense of purpose. This also helps create a positive work culture.

5 Causes of Security Risks and Privacy Breaches in Integrated Systems

To effectively put the security measures mentioned earlier on in place, you must be familiar with the causes of these risks and breaches. Here are some of the causes.

Unauthorized access

Security and privacy breaches can occur in an organization due to unauthorized access. Open access to sensitive data is a security risk. Unauthorized access can happen as a result of flawed access control mechanisms and weak passwords.

Inadequate encryption

In a business using system integration, data needs to be encrypted. When data moves between integrated systems without proper encryption, sensitive data gets into the hands of unauthorized people, increasing the risk of security and privacy breaches.

Lack of updates

Security updates are compulsory for an organization using any form of system integration. These updates fix security loopholes not covered during the initial download or installation. Failure to regularly update your systems will lead to undue exposure to security risks.

Exposure to third-party systems

If your systems are integrated with third-party systems, you're vulnerable to security risks and privacy breaches. Third-party providers or vendors lacking proper security measures expose you to risks.

Insider threats

Authorized insiders can be threats, too. Staff or vendors with access to your systems can intentionally or mistakenly abuse or misuse this privilege by leaking sensitive information.

Tighten Your Data Security within Integrated Systems with Best Practices

Every solution has its side effects. One of the side effects of integrated systems is vulnerability to security and data breaches. To manage these risks, you have to have a deep understanding of how integrated systems work. That's not all; you also have to know the causes of security risks and privacy breaches in integrated systems.

To protect sensitive financial and employee data in integrated systems, ensure you use secure payment gateways and data subject access requests (DSARs). Tax compliance and access control are also ways to secure sensitive data. Don't forget to encrypt your data – it provides an extra layer of protection from unauthorized access.

Securing sensitive financial and employee data in integrated systems is not a one-time job; it is a continuous effort. This is because hackers and other cybercriminals are always devising new ways to compromise integrated systems. Therefore, constant scouting for innovative protective measures is the way to go.