Why PCI compliance matters more than ever in the financial sector

Businesses in the finance sector generate and manage an enormous amount of data. Financial institutions, like banks and lenders, can now collect, store, and analyze more data than ever, thanks to advancements in cloud computing and data management technologies. The rise in eCommerce has also contributed immensely as every click, interaction, and purchase represents data that companies can leverage to create additional value for consumers. Additionally, the era of mainstream AI has begun, and financial institutions are motivated to use the technology effectively.

However, sensitive data attracts bad actors. Cybercriminals recognize the value of consumer data and aim to take advantage of finance firms who are vulnerable. According to the International Monetary Fund’s 2024 Global Financial Stability Report, one-fifth of all cyberattacks are against the financial sector. A major reason why is that the finance industry depends heavily on third-party IT providers. Outsourcing certain IT responsibilities decreases risk and frees up internal resources. However, not all third-party IT vendors are created equal, and many are still learning how to navigate cutting-edge AI themselves, exposing clients to potential problems. 

Understanding PCI compliance

In the finance space, IT vendors must have sophisticated data security and data management practices. Those who are involved in enterprise AI initiatives must prove that they can handle and protect sensitive data at scale. More financial firms are starting to adopt or build virtual assistants, machine learning algorithms for fraud detection, and generative AI applications, which only increases the need for high-quality data. Today’s data leaders have the dual mandate of safeguarding what they have while maintaining the integrity of the applications they build on top of their data. For many, this is only possible with the help of outside experts.

Fortunately, the Payment Card Industry’s (PCI) Data Security Standard (DSS) for Service Providers offers the proof leaders need to choose the right third-party IT service providers. Being PCI compliant means an organization meets strict standards when it comes to processing, storing, and transmitting credit card data. These requirements were developed by the PCI Security Standards Council, an independent group created by industry leaders, including Visa, Mastercard, and American Express. The council continues to refine PCI DSS requirements to ensure that organizations evolve their data security practices with changes in the macro environment. 

For example, the council announced Version 4.0 of the PCI DSS in March of 2022. Version 4.0 was formally adopted in March of 2024, increasing the number of requirements companies must meet from 370 to more than 500. Vendors also receive one of four PCI compliance level designations depending on how many transactions they process every year, with the highest level – Level 1 – going to businesses that process over 6 million transactions annually.

Cloudera, a data solutions provider and vendor of eight of the top ten global banks, recently achieved Level 1 PCI DSS compliance. Cloudera helps financial institutions adopt and scale AI and Generative AI while navigating the associated risks, providing a secure environment for managing the vast volumes of data needed to train AI models. Because of this work, Cloudera recognized the importance of meeting the highest standard of data management practices. 

PCI non-compliance is not an option  

Operating outside of PCI compliance carries significant risk. Improper data security in the financial sector can lead to massive data breaches, affecting millions of consumers. Data breaches not only compromise private information but can also cost organizations large sums of money in legal fees, penalties, and lost revenue. Companies that experience data loss or bigger cybersecurity attacks are often subject to federal audits and must invest additional capital to bolster data infrastructure.

What’s more, data breaches erode consumer trust and damage a brand’s reputation in the marketplace. At a time when consumers have more power and information than ever, it’s paramount for financial institutions to mitigate risk and avoid catastrophic data issues. Working with a PCI-compliant vendor is one way to guard against these problems and give people confidence that their data is safe over the long term. 

Cloudera is committed to helping the largest banks and financial institutions in the world leverage big data and AI effectively. Achieving Level 1 PCI DSS 4.0 compliance gives financial firms peace of mind to pursue large-scale digital transformation projects. 

To learn more about Cloudera’s compliance certifications, visit the Cloudera Trust Center.