In our previous blog, Understanding the Importance of Encryption: Use Cases Across Various Regulations, we delved into data encryption, exploring what it is and why it is crucial for securing sensitive information. We highlighted how encryption acts as a protective barrier, transforming readable data into an unreadable format that can only be decrypted by authorized people or systems.
In this article, we will explain the importance of file and folder encryption and how it helps to comply with various EU regulations.
The Necessity of File and Folder Encryption
With the growth of digital operations, the amount of sensitive information your organization handles is increasing rapidly. From financial records to personally identifiable information (PII) and intellectual property, critical data has become a prime target for cybercriminals. But here's the good news: there is a way to protect it.
Encrypting your files and folders is one of the most effective ways to safeguard this data. Even if unauthorized individuals manage to access your system, encryption ensures they won’t be able to read or use the data without the correct decryption key. This layer of security not only protects sensitive data but also helps comply with stringent regulatory requirements set by the EU.
EU Regulations and Their Encryption Requirements
The EU has established rigorous regulations to protect data and ensure cybersecurity across member states. Key among these are the Digital Operational Resilience Act (DORA), the Network and Information Security Directive 2 (NIS2), and the General Data Protection Regulation (GDPR) - each crucial for data security. These regulations emphasize the importance of robust encryption practices, including file and folder encryption, to maintain data authenticity, integrity, and confidentiality.
In the following sections, we will explore these regulations in detail:
1. Digital Operational Resilience Act (DORA)
DORA focuses on enhancing the financial sector’s operational resilience against cyber threats. It requires financial entities to implement adequate measures to protect their Information and Communication Technology (ICT) systems and data. According to DORA, sensitive data must be protected at rest and in motion, and in secure and insecure environments. In addition, any time data is shared, encryption is mandatory.
All financial entities affected by DORA must achieve compliance by January 17, 2025.
Use case example for DORA Compliance:
Consider a national bank handling a vast amount of financial data. To comply with Dora, the bank must secure all files containing customer information, such as account numbers. Encryption is key to this protection, ensuring that files are safeguarded at rest, in transit, and even in the cloud from unauthorized access. This not only protects the data but also helps to achieve DORA compliance.
Learn more about Utimaco’s approach for DORA in our webinar.
2. Network and Information Security Directive 2 (NIS2)
NIS2 aims to strengthen cybersecurity across critical sectors, for example, energy, healthcare, and logistics. It mandates that all organizations implement appropriate security measures, such as encryption, to protect sensitive data wherever possible.
The implementation deadline for NIS2 is approaching soon, October 2024.
Use case example for NIS2 Compliance:
Imagine a critical infrastructure like healthcare, where patient data must be protected across all locations - whether in local documents, cloud storage, or elsewhere. By encrypting this data, the healthcare system not only secures sensitive information but also meets the compliance requirements set by NIS2’s
3. General Data Protection Regulation (GDPR)
GDPR, which came into effect in May 2018, is one of the EU's most comprehensive data protection regulations. It mandates that organizations processing the personal data of EU citizens implement adequate security measures to ensure the free and secure movement of data, similar to how people move freely within the EU. According to the GDPR, personal data is any information related to an individual, encompassing their private, professional, or public life.
Use case example for GDPR Compliance:
To meet GDPR requirements, an e-commerce company operating in the EU must encrypt files and folders containing sensitive customer information, such as names, addresses, and payment details. This encryption ensures adherence to strict data protection requirements and mitigates the risk of hefty fines for non-compliance.
The Critical Role of File and Folder Encryption in DORA, NIS2, and GDPR
What stands out across DORA, NIS2, and GDPR is their shared emphasis on encryption as a critical component of data security. Each regulation recognizes that encryption is essential for protecting sensitive information, ensuring that organizations can prevent unauthorized access and demonstrate compliance with legal requirements. The necessity for file and folder encryption is a clear commonality, underscoring its importance across various sectors and use cases.
Starting with Utimaco’s LAN Crypt File and Folder Encryption
Given these regulations' stringent requirements, organizations must implement robust file and folder encryption solutions. By implementing Utimaco’s solution, you will benefit from:
- Transparent Encryption
- Data Protection at Rest and in Motion
- Compliance Fulfilment
- Role-based Access Management
- Secure Data Sharing
- Secure Collaboration
Utimaco’s LAN Crypt File and Folder Encryption offers a software-based data encryption solution for securing your data. Transparency in encrypting all data according to policy guidelines protects against unauthorized access.
Try our cloud-based version with the 30-day free trial
Conclusion
The importance of file and folder encryption cannot be overstated, especially in light of stringent EU regulations such as DORA, NIS2, and GDPR. Each regulation emphasizes the need for encryption to protect sensitive data and ensure compliance. By implementing LAN Crypt File and Folder Encryption, you can provide data security while meeting regulatory requirements and avoiding hefty fines.
