Financial data, customers’ records and databases, ideas and plans, etc. This information is the raw material that forms the basis of organisational success and it is therefore critical that it is secured. Encryption, a tool that has been established as a critical weapon in the fight against cybercrime is the only way through which such sensitive information can be protected from being accessed, stolen or used by unauthorized persons.
Encryption is the process of converting plain text or easily understandable data into what is called cipher text with the help of some formula called algorithm and a key. This process makes it possible even if the data is compromised it cannot be understood and hence useless to the attacker. When it comes to data security, you can reduce the main threats of data leakage, unauthorized data access, and compliance breaches with the help of reliable encryption measures.
How Encryption Works
The very core of the most encryption techniques is the mathematical algorithm that changes the given plaintext (text that can be read) to the ciphertext (text that cannot be read). This transformation is realised through the employment of encryption algorithms and the encryption keys. Encryption algorithms refer to the rules and procedures that are used in the encryption and decryption processes while the encryption keys are the codes or passwords that are used to unlock the encrypted data.
The process of encryption typically involves the following steps:
- Data Preparation: Here, the original message is defined and preprocessed before it is encrypted.
- Key Generation: An encryption key which could be the symmetric key, which is a single key or the asymmetric keys which are a pair of public and private keys is created.
- Encryption: The plaintext data is encoded into ciphertext with the help of the selected encryption algorithm and the encryption key.
- Transmission or Storage: It is then sent or kept as the ciphertext while the encryption key is safely maintained.
- Decryption: If at any one time the ciphertext needs to be used, the encryption key is used to decipher the ciphertext to yield the original plaintext data.
It also helps in protecting the content of the message in a way that even if the ciphertext is intercepted or stolen, cannot be decrypted or read without the right encryption key.
Encryption Methods and Algorithms
Encryption methods and algorithms are numerous and each of them has some peculiarities and application areas. Some of the most widely used encryption methods include:
- Symmetric-Key Encryption: This makes use of a single key used for both the encryption and decryption processes like AES and Blowfish.
- Asymmetric-Key Encryption: It is also called asymmetric key encryption where a pair of keys is used, one for encryption known as public key and the other for decryption which is the private key such as RSA and Elliptic Curve Cryptography (ECC).
- Hashing: This technique generates the data into a fixed length and unique output known as hash that cannot be decrypted back to data for example SHA-256 and MD5.
- Hybrid Encryption: This approach is a blend of the symmetric and asymmetric type of encryption whereby the data encryption is done with the help of a symmetric key while the exchange of key is done with the help of asymmetric key.
The decision on which encryption method to implement, as well as the specific algorithm to use, will be influenced by parameters such as the nature of the data to be encrypted, the level of protection that is deemed necessary, the computational power at one’s disposal, and the regulatory standards that govern your organization.
Fundamental Components of Encrypting Sensitive Data
Effective encryption for sensitive data involves several critical components, including:
- Encryption Key Management: Key management entails creation, storage, frequent replacement and careful access to keys with a view of ensuring that the keys for the encryption of information are protected.
- Encryption Algorithm Selection: Choosing the right encryption algorithm such as AES, RSA, or ECC based on the security level required by the application and that of the standards.
- Encryption Implementation: The way to apply encryption to a firm’s storage, transfer, and processing of data for complete security.
- Encryption Monitoring and Auditing: To be able to assess the efficiency of the encryption procedures, to monitor the processes continuously, to indicate suspicious activities and to conduct regular assessment of the encryption measures.
- Encryption Training and Awareness: Creating awareness to your employees that data requires protection through encryption, management of keys and the correct standard procedures required in handling data.
- To build a proper encryption model and satisfy the needs of the NIS2 and DORA regulations, it is necessary to enhance the indicated components.
Encryption and NIS2/DORA Compliance
The EU NIS2 directive and the recently proposed DORA have made the use of encryption an essential component in the protection of ICTs and data belonging to financial institutions.
NIS2 requires an organisation to implement sufficient technical and organisational measures with regard to risks related to the security of network and information systems. This comprises encryption as one of the security services which is responsible for handling the confidentiality, integrity and availability of data. While DORA establishes that financial institutions and other regulated participants must have a proper strategy of encryption of their digital operational resilience.
With the help of the implemented complex encryption solutions, it is possible to demonstrate compliance with these regulations and protect information. Encryption plays a crucial role in meeting the following specific requirements:
- Data Protection: NIS2 and DORA also pay attention to the need to ensure the protection of data, with the use of encryption as one of the methods.
- Incident Response and Reporting: Encryption can help in containing the impact of the security incident and enable speedy management of the incident, and reporting where required in accordance with the regulations.
- Risk Management: The concept of risk control is significant in risk management because it helps in identifying, assessing, and managing risks in data leakage and cyber threats.
- Business Continuity and Disaster Recovery: Encryption can thus preserve the availability of the data and the accuracy of the data in a disruptive or disaster scenario, which can help keep core business functions going.
- Third-Party Vendor Management: Encryption can also be applied with the third party service providers because it can help the organizations to ensure that the data being shared is secure and the appropriate measures have been taken as required by the regulations.
That is why, if you correlate encryption with the specifics of NIS2 and DORA requirements, you will be able to enhance the security of your valuable data and demonstrate the compliance and business sustainability simultaneously.
NIS2 and DORA Compliance: Benefits of Encryption
Adopting a comprehensive encryption strategy can provide numerous benefits in the context of NIS2 and DORA compliance:
- Enhanced Data Security: Encryption shields the data from all forms of exploitation, theft, and misuse and assists in avoiding cases of data leakage and noncompliance.
- Improved Incident Response: Encryption can also help in moderating the impact of security violation and help in the handling of the security violations as mandated by the regulations on reporting of the incidents.
- Strengthened Risk Management: Encryption is one of the basic procedures for handling the risks in accordance with the results of the risks of data leakage and cyber threats.
- Increased Operational Resilience: Therefore, through the availability of easy-to-retrieve data during disruptions or disasters, encryption maintains the business processes that are core to DORA compliance.
- Streamlined Compliance: It is possible to adapt encryption according to the provisions stated by NIS2 and DORA, which can make compliance less of a challenge and demonstrate to the world that your organization wants to protect data and ensure business continuity.
Therefore, by using the encryption, you will be able to solve the requirements of the NIS2 and DORA legislation and enhance your organization’s security and, therefore, safeguard its most valuable asset, which is information.
Conclusion
Due to the dynamic nature of threats in the cyberworld and the growing legal mandates for data security, encryption has become a way of safeguarding information. While it is essential to acknowledge that encryption is a rather intricate process, understanding the basics, available techniques, algorithms, and main pillars of an encryption strategy, it is possible to construct an effective solution to safeguard your data and correspond to NIS2 and DORA standards.
