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How Network Segmentation Helps Financial Firms Achieve Safety and Compliance

How Network Segmentation Helps Financial Firms Achieve Safety and Compliance

For financial institutions, separating the cardholder data environment and its connected-to and supporting systems is crucial to protect cardholder data and prevent damaging breaches. This practice of network segmentation also reduces the scope of compliance and lessens the effort required to efficiently manage a firm’s network.

To further expand upon the scope and principles of network segmentation for financial institutions, the PCI Security Standards Council released guidance on PCI DSS scoping and network segmentation. This guidance helps financial institutions better understand what systems are in scope for compliance and enables them to effectively segment their network.

Let’s take a closer look at the advantages of network segmentation for financial firms and how organizations can segment their network for both safety and compliance.

Benefits of Network Segmentation for Financial Institutions

Benefits of Network Segmentation for Financial Institutions

Network segmentation isn’t a direct PCI DSS requirement. However, the PCI Security Standards Council highly recommends it as a best practice to prevent successful data breaches

Here are significant benefits that network segmentation can provide financial firms:

  • Reduced risk exposure: Network segmentation creates an added layer of defense against data breaches. Isolating the systems that process, store, and transmit cardholder data from the rest of a financial institution’s network helps diminish the potential for data exposure, thus reducing the risk of security breaches.
  • Streamlined compliance: With a financial firm’s numerous branches, facilities, and systems, PCI compliance can be a taxing endeavor. Network segmentation limits the scope of an organization’s network that falls under PCI assessment, thereby saving on time and the effort associated with meeting PCI DSS requirements.
  • Decreased network complexity: Network segmentation also limits the complexity of a financial institution’s card processing network. Consolidating card processing systems into fewer, more controlled locations simplifies the maintenance and management of the card processing network. Furthermore, it lessens the amount of effort required to implement PCI DSS controls.

Despite the advantages of network segmentation, not all financial institutions may need to segment their networks. If firms need access to cardholder data, including full credit card numbers and transaction details, and this data appears in multiple areas of an organization’s network, segmentation may not be effective. For firms where segmentation is applicable, consider these approaches to implementation.

6 Steps to Effective Network Segmentation for Financial Institutions

6 Steps to Effective Network Segmentation for Financial Institutions

Here are steps that organizations can take when segmenting their networks:

  1. Define a clear scope for network segmentation.

    Start with the assumption that your entire network is in scope. Any system that connects to or supports your payment processing network becomes a potential attack vector and poses a risk to the entire network.

    That’s why it’s important to determine how cardholder data flows through your network and identify the components of your cardholder data environment, including all systems — be it internal or third-party entities — that connect to or support it.

    Create a data flow diagram to illustrate the flow and location of cardholder data upon processing, transmission, and storage. Based on this, create a network diagram to segment your network, with distinct designations for in-scope and out-of-scope systems. Evaluate these diagrams regularly to account for any changes in the network, as well as in-scope and out-of-scope systems and areas.
  1. Implement security controls.

    To secure your segmented network zones, use firewalls, routers, and switches. Enforce policies and strong access control lists that permit traffic only through designated ports and only between in-scope systems, essentially blocking traffic from all other ports and out-of-scope systems. This allows your organization to better control traffic between network segments and reduces the risk of out-of-scope systems compromising the payment processing environment.

    For instance, traffic between the cardholder data environment and the shared services network that provides authentication, security, and other support services is permitted through an assigned port. On the other hand, connection attempts between a financial firm’s corporate network and the cardholder data environment are blocked.
  1. Apply the principle of least privilege.

    Restrict access to the payment processing network to specific administrative users. Assign only the necessary privileges for admin users to perform their roles, whether it’s configuration, management, maintenance, or support. Employ multi-factor authentication for access and log all access events, with detailed information such as the action performed and the data accessed. Manage network changes for secure design, proper configuration and detection of any unauthorized changes.
  1. Actively monitor your card processing network for suspicious activity.

    It’s essential to administer controls such as real-time monitoring and logging of all network-related events for efficient network segmentation. Firewalls, Intrusion detection and intrusion prevention systems can be used to bolster the security defenses of a financial institution’s multiple network segments. Integrating intrusion detection and prevention systems into segmentation controls allows for the detection and prevention of attacks that could result in unauthorized access to the cardholder data environment from any out-of-scope systems.
  1. Conduct periodic verification and testing of your segmentation controls.

    Perform robust internal and external penetration testing on your network segmentation controls to validate their effectiveness. It’s important to undertake verification and testing regularly to ensure that segmentation controls are strong enough to protect against new and existing threats.
  1. Bring in the experts.

    An external team of network engineers with proven expertise in the field can provide an innovative approach to effectively segment your financial institution’s network. They can guide you through the analysis, design, and implementation of your network segments and create a solution tailored to the unique needs of your organization.

Trust DataComm to partner with your financial institution to ensure customer data remains safe and your network is in full compliance with PCI standards. Our team of experts can assist with your organization’s compliance and network security needs. To learn more about how we can help you, contact us today.


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This entry was posted in financial institutions, network management, audit and compliance

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