The Industries That Need Gramm-Leach-Bliley Act Compliance the Most (And Why)

Protecting consumer financial information isn’t just good business practice—it’s the law. The Gramm-Leach-Bliley Act (GLBA) represents one of the most significant regulatory frameworks governing the collection, use, and protection of consumer financial data. While GLBA compliance affects numerous sectors, certain industries face particularly high stakes when it comes to adhering to these regulations.

Understanding the Gramm-Leach-Bliley Act: A Brief Overview

Enacted in 1999, the Gramm-Leach-Bliley Act fundamentally reshaped the financial services landscape by repealing provisions of the Glass-Steagall Act and allowing commercial banks, investment banks, securities firms, and insurance companies to consolidate. However, with this unprecedented integration came heightened concerns about consumer privacy.

The GLBA established three principal regulations:

1. The Financial Privacy Rule: Requires financial institutions to provide customers with privacy notices explaining information-sharing practices.
2. The Safeguards Rule: Mandates that financial institutions implement comprehensive security programs to protect customer information.
3. The Pretexting Provisions: Prohibits the practice of obtaining personal information through false pretenses.

The cost of non-compliance can be severe. In 2019, Equifax agreed to pay up to $700 million to settle federal and state investigations into its 2017 data breach affecting approximately 147 million customers. With penalties reaching up to $100,000 per violation and potential criminal charges for officers and directors, GLBA compliance is not optional—it’s essential.

The Financial Services Industry: The Primary Target

It’s no surprise that traditional financial services companies stand at the center of GLBA compliance requirements. These organizations handle vast quantities of sensitive financial data daily, making them both prime targets for cyberattacks and focal points for regulatory scrutiny.

Banks and Credit Unions

Commercial banks and credit unions process millions of transactions daily, each containing sensitive personally identifiable information (PII). According to a 2022 IBM report, the average cost of a data breach in the financial sector reached $5.97 million—41% higher than the global average across industries.

These institutions must maintain robust identity management architectures that securely authenticate users while preventing unauthorized access to customer financial information. Modern identity governance solutions help these organizations implement the principle of least privilege, ensuring employees can only access the specific customer data necessary for their roles.

Investment Firms and Brokerages

Investment firms and brokerages handle both financial data and highly sensitive investment information. The Securities and Exchange Commission (SEC) has increasingly focused on cybersecurity compliance, with 90% of SEC examinations now including cybersecurity components.

These organizations require sophisticated access governance solutions to maintain GLBA compliance while supporting the dynamic nature of their business. By automating access certification and implementing continuous compliance monitoring, these firms can better protect client data while demonstrating regulatory adherence.

Insurance Companies

The insurance sector handles extensive financial and health information, placing it squarely within GLBA’s purview. Recent research from Deloitte found that 71% of consumers would consider switching insurance providers following a data breach, highlighting the business impact beyond regulatory penalties.

Insurance companies must implement comprehensive identity and access management solutions that can securely manage complex relationships between agents, brokers, customers, and internal staff—all while maintaining strict compliance with GLBA requirements.

Beyond Traditional Financial Services: Other Critical Industries

While traditional financial institutions form GLBA’s core focus, several other industries face significant compliance requirements due to their handling of consumer financial information.

Fintech Companies

The explosive growth of financial technology companies has transformed how consumers interact with financial services. However, this innovation brings increased regulatory scrutiny. According to a KPMG survey, 57% of fintech companies cite regulatory compliance as their primary challenge.

Fintech firms must implement robust identity management solutions that scale with their rapid growth while maintaining strict compliance. Modern containerized identity-as-a-service (IDaaS) solutions offer the agility these companies need while ensuring GLBA adherence through automated compliance workflows and comprehensive audit trails.

Retail and E-commerce

Retailers who extend credit, store payment information, or offer financial services fall under GLBA’s jurisdiction. With e-commerce sales projected to exceed $7 trillion globally by 2025, the volume of financial data handled by these companies continues to grow exponentially.

Modern retailers require identity management solutions that can securely manage customer financial data while supporting omnichannel shopping experiences. Implementing strong password management and multi-factor authentication helps these organizations protect customer financial information while maintaining GLBA compliance.

Healthcare Providers

While primarily governed by HIPAA, healthcare organizations that handle billing, insurance claims, and payment processing also face GLBA compliance requirements. Research indicates that healthcare suffers from the highest data breach costs of any industry, averaging $10.10 million per incident.

Healthcare organizations need specialized identity management solutions that address both HIPAA and GLBA requirements. HIPAA-compliant identity management systems help these organizations implement appropriate access controls while maintaining comprehensive audit trails necessary for regulatory compliance.

Educational Institutions

Colleges and universities that process student loans and financial aid information must comply with both GLBA and FERPA regulations. According to Educause, 54% of higher education institutions report significant challenges in meeting security and privacy requirements.

Educational institutions can benefit from FERPA-compliant identity management solutions that specifically address the unique regulatory requirements they face. These solutions help automate compliance processes while providing the flexibility needed to support diverse campus environments.

The Role of Modern Identity Management in Achieving GLBA Compliance

Organizations across all industries increasingly recognize that effective identity management represents the cornerstone of GLBA compliance. As the perimeter-based security model continues to dissolve, identity has become the new security boundary.

Implementing a Zero-Trust Approach

The zero-trust security model—which operates on the principle of “never trust, always verify”—aligns perfectly with GLBA requirements. By implementing comprehensive identity verification at every access point, organizations can better protect customer financial information while demonstrating regulatory compliance.

Modern identity management platforms support zero-trust implementation through:

• Continuous authentication and authorization
• Context-aware access policies
• Just-in-time and just-enough access provisioning
• Comprehensive visibility into all access activities

Automating Compliance Workflows

Manual compliance processes are both error-prone and resource-intensive. According to Ping Identity research, organizations spend an average of 3,850 hours annually on identity-related compliance activities—time that could be better invested in innovation and customer service.

Automated identity governance workflows help organizations streamline GLBA compliance through:

• Automated user provisioning and deprovisioning
• Regular access certification campaigns
• Comprehensive audit logging and reporting
• Continuous policy enforcement

Enhancing User Experience While Maintaining Compliance

Balancing security requirements with user experience remains a significant challenge. Research from Okta indicates that 86% of users have abandoned an online transaction due to cumbersome authentication requirements.

Advanced identity management solutions help organizations balance these competing priorities through:

• Risk-based authentication that adjusts security requirements based on context
• Self-service capabilities that reduce administrative burden
• Single sign-on that simplifies access while maintaining security
• Mobile-first design that supports today’s distributed workforce

Building a GLBA Compliance Roadmap with Modern Identity Solutions

Organizations seeking to enhance their GLBA compliance posture should consider the following steps:

1. Conduct a Comprehensive Risk Assessment

Begin by identifying all systems containing customer financial information and evaluating current security controls against GLBA requirements. This assessment should consider both technical and administrative safeguards.

2. Implement Strong Access Controls

Establish robust identity governance processes that enforce the principle of least privilege across all systems containing customer financial information. Self-service identity management solutions can help streamline these processes while maintaining comprehensive audit trails.

3. Automate User Lifecycle Management

Implement automated provisioning and deprovisioning workflows to ensure access rights remain current as employees join, move within, or leave the organization. This automation reduces the risk of orphaned accounts that could lead to unauthorized access and compliance violations.

4. Enhance Authentication Security

Deploy multi-factor authentication for all access to systems containing customer financial information. Modern MFA solutions support various authentication methods, allowing organizations to balance security requirements with user experience.

5. Establish Comprehensive Monitoring and Reporting

Implement continuous monitoring of all access to customer financial information, with automated alerts for suspicious activities. Comprehensive reporting capabilities help demonstrate compliance during regulatory examinations while identifying potential security gaps.

Conclusion: The Future of GLBA Compliance

As financial services continue to evolve, GLBA compliance requirements will likely expand to address emerging threats and technologies. Organizations that implement comprehensive identity management solutions now will be better positioned to adapt to these changing requirements while protecting customer financial information.

By moving beyond checkbox compliance to embrace security as a business enabler, organizations can transform regulatory requirements into competitive advantages. Modern identity management solutions help organizations across all industries achieve this transformation—protecting customer data, demonstrating regulatory compliance, and building trust in an increasingly digital economy.

For organizations seeking to enhance their GLBA compliance posture while improving operational efficiency, SOX compliance solutions from Avatier provide the comprehensive capabilities needed to address today’s complex regulatory environment. With automated workflows, robust access controls, and comprehensive reporting, these solutions help organizations across all industries protect customer financial information while demonstrating regulatory compliance.

The industries that need GLBA compliance the most are those that handle significant volumes of consumer financial information—whether as their primary business or as part of broader operations. By implementing comprehensive identity management solutions, these organizations can better protect this sensitive data while avoiding the substantial penalties associated with non-compliance.