Why Enrolling Devices in Mobile Device Management and Data Loss Prevention is More Secure than a VPN for Financial Advisors

In the financial services industry, securing sensitive client data is paramount, with strict regulations such as the Code of Federal Regulations (CFR) and FINRA rules mandating robust data protection mechanisms. With mobile devices now ubiquitous in the workplace, financial advisors and registered investment advisors (RIAs) must adopt advanced strategies to safeguard information. While Virtual Private Networks (VPNs) have been a go-to solution for securing remote connections, they are no longer sufficient as standalone protection. Mobile Device Management (MDM) and Data Loss Prevention (DLP) technologies offer superior protection against modern threats and help ensure regulatory compliance.

This article explores why MDM and DLP are more secure than VPNs, identifies the risks posed by local network attacks, and examines how Google Workspace and Microsoft 365 provide tools to protect financial institutions.

The Limitations of VPNs in Modern Security

VPNs are widely used to establish secure, encrypted connections between remote devices and a corporate network. They can hide traffic from prying eyes, encrypt data, and mask users’ IP addresses. However, VPNs have inherent limitations that expose financial advisors and RIAs to risks:

No Endpoint Protection: VPNs do not monitor or control the device itself. Once a device is connected to the network, any malware or vulnerabilities on that device could spread through the corporate environment.
Local Network Risks: VPNs primarily protect data while it travels over the internet, but they do not secure a device from threats on the local network. If an employee connects to a VPN from an insecure public Wi-Fi or home network, attackers could still access the device and compromise sensitive data.
Lack of Data Loss Prevention: While a VPN encrypts data in transit, it does not prevent data from being exfiltrated by malicious insiders or compromised applications. VPNs provide no controls to stop data from being copied to unauthorized devices or services.
Inadequate Compliance Features: For financial advisors, VPNs may not meet the strict requirements of the Securities and Exchange Commission (SEC) or FINRA concerning data protection. Regulations require robust, continuous monitoring and reporting of data, which VPNs lack.

MDM and DLP: The Better Approach

Mobile Device Management (MDM) and Data Loss Prevention (DLP) technologies offer a more comprehensive approach to securing devices and protecting sensitive data, addressing many of the gaps left by VPNs.

Mobile Device Management (MDM)

MDM solutions allow organizations to monitor, manage, and secure devices that access corporate networks. With MDM, financial firms can ensure that every device, whether a smartphone, tablet, or laptop, meets security standards before accessing critical information. Here’s why MDM is more secure than a VPN:

Device Encryption and Control: MDM enforces encryption on all devices and allows for remote wiping of devices that are lost, stolen, or compromised.
Access Controls: Administrators can enforce strict access controls based on device type, location, and user credentials, ensuring that only authorized devices can connect to the network.
Patch and Update Management: MDM enables administrators to push security patches and updates automatically to all enrolled devices, preventing vulnerabilities that could be exploited by attackers.
App Management: MDM systems can manage and restrict applications on devices, ensuring that only secure and approved apps are installed.
Monitoring and Reporting: MDM platforms provide real-time visibility into device compliance, helping financial advisors maintain compliance with SEC and FINRA requirements for data protection and reporting.

Data Loss Prevention (DLP)

DLP technologies monitor and control the movement of sensitive data, preventing unauthorized access, transfer, or exfiltration. For financial advisors, DLP is crucial for ensuring that sensitive client information remains secure and complies with regulatory obligations.

Content Monitoring: DLP solutions scan data in motion and at rest for sensitive information, such as Social Security numbers, financial details, or investment records. DLP can block or alert administrators when sensitive data is sent to unauthorized locations.
Policy Enforcement: DLP allows organizations to enforce security policies based on data classification. For example, sensitive data may be allowed to be accessed internally but restricted from being emailed or uploaded to cloud storage services.
Granular Controls: DLP offers fine-grained control over who can access, copy, or share sensitive data, reducing the risk of insider threats or inadvertent data leakage.

Compliance with Regulations: Why MDM and DLP Are Necessary

Financial advisors and RIAs are bound by a host of regulations that govern how they must handle sensitive data. Failure to comply with these regulations can result in severe penalties, including fines, reputational damage, and loss of business.

Code of Federal Regulations (CFR): The CFR, particularly Title 17, Part 248 (Regulation S-P), governs the privacy of consumer financial information. This regulation requires that financial institutions implement measures to protect customer data from unauthorized access or disclosure. MDM ensures that only secure, compliant devices can access customer data, while DLP prevents the unauthorized movement or sharing of sensitive information.
FINRA Rule 4511: FINRA requires firms to retain and secure records of communications, transactions, and client data. DLP solutions can ensure that sensitive records are not inadvertently or maliciously deleted or transferred, supporting compliance with these retention requirements.
FINRA Cybersecurity Guidelines: FINRA has issued guidelines that emphasize the importance of protecting devices and data from cyber threats. MDM and DLP solutions align with these guidelines by providing continuous monitoring, control, and protection of devices and data, reducing the risk of data breaches.

Google Workspace: Technologies for Securing Endpoints and Preventing Data Loss

Google Workspace offers a robust set of tools that financial advisors can use to secure devices and prevent data loss. Key technologies include:

Google Endpoint Management: This MDM solution allows administrators to enforce security policies across all devices connected to Google Workspace. It supports remote wipe, encryption enforcement, and device health checks to ensure that only compliant devices can access sensitive data.
Google Data Loss Prevention (DLP): Google Workspace’s DLP features allow financial firms to scan documents, emails, and files for sensitive information and apply security policies to prevent unauthorized sharing. DLP can block or alert on attempts to send sensitive data outside of the organization.
Google Vault: Vault is Google’s eDiscovery and archiving tool that helps firms comply with FINRA’s record retention requirements. It allows administrators to archive emails, chat messages, and files, ensuring that records are securely stored and easily accessible for audits.

Microsoft 365: Securing Devices and Preventing Data Loss

Microsoft 365 offers similar capabilities to secure devices and protect sensitive data:

Microsoft Intune: Microsoft’s MDM solution, Intune, provides a centralized platform for managing and securing devices. It enables organizations to enforce encryption, push security patches, and control access to corporate data, ensuring compliance with regulatory requirements.
Microsoft Purview DLP: Purview provides data loss prevention features across Microsoft 365 applications, including Outlook, SharePoint, and OneDrive. Financial firms can create DLP policies that identify sensitive data and prevent unauthorized sharing, ensuring compliance with SEC and FINRA regulations.
Microsoft Defender for Endpoint: This solution provides advanced threat protection for endpoints, detecting and responding to malware, phishing attacks, and other threats in real time.

Use Cases: How MDM and DLP Outperform VPNs

Use Case 1: Local Network Attack Prevention Consider a financial advisor who works remotely from a public Wi-Fi hotspot. While a VPN can encrypt the connection, it does not prevent an attacker on the local network from compromising the advisor’s device before the VPN connection is established. With MDM, the device’s security posture is monitored continuously. Any security risks are mitigated through automatic patching, application management, and device encryption, reducing the chance of an attack.

Use Case 2: Data Loss Prevention An RIA handling sensitive client data is at risk of losing control of that data if an employee accidentally emails a spreadsheet with personally identifiable information (PII) to an unauthorized recipient. VPNs provide no protection in this scenario. However, with DLP, the email would be scanned, flagged, and blocked from being sent, ensuring that sensitive information remains secure.

Use Case 3: Compliance Reporting A VPN provides little insight into the device’s security compliance status. MDM solutions like Google Endpoint Management and Microsoft Intune, however, offer detailed reporting on device compliance. This is essential for financial firms to demonstrate adherence to regulatory requirements, such as FINRA Rule 4511.

For financial advisors and RIAs, securing sensitive data requires more than a VPN. Mobile Device Management and Data Loss Prevention technologies offer stronger, more comprehensive protection for devices and data, ensuring compliance with the strict regulations governing the financial industry. With MDM and DLP, firms can safeguard client data, prevent data loss, and reduce the risk of cyberattacks, providing a level of security that VPNs alone cannot match.