No Room for Error in IT Asset Disposal for Financial Institutions
When it comes to IT asset disposal (ITAD), financial institutions have zero margin for error. Mistakes don’t just cost money—they destroy reputations, trigger audits, and invite lawsuits. One wrong move with a decommissioned hard drive, copier, or server can expose sensitive customer data, making them prime targets for cybercriminals.
One ITAD Mistake = Catastrophic Fallout
In finance, every device holds highly sensitive data: account numbers, tax IDs, investment profiles, and personally identifiable information (PII). That makes ITAD in this industry both high-stakes and highly regulated.
If you’re not following GLBA, SOX, and FFIEC guidance to the letter, you’re inviting fines, breaches, and reputational collapse.
Real-World Example: Morgan Stanley’s $163M Mistake 
In 2016, Morgan Stanley made a costly IT asset disposal strategy error. The firm hired a moving company—not a certified ITAD provider—to decommission two data centers. The result? Devices containing sensitive client information were resold online without being properly wiped.
The cost?
- 15 million customers impacted
- $163 million in fines and legal costs
- Public and regulatory trust severely damaged
This case proves that even one poor ITAD decision can upend years of compliance work.
Learn more about how Securis can help you avoid costly ITAD mistakes – Contact Us today!
Hidden ITAD Risks For Financial Institutions
Even the most diligent teams miss things. Securis recently partnered with a financial services firm that had excellent internal controls: inventory management, internal shredding, and routine audits.
Still, we uncovered three unlisted data-bearing devices, including a hard drive in a copier—none had been wiped.
Hidden data devices are a common weak point in internal ITAD efforts. Printers, copiers, servers, and smart displays often contain internal memory or embedded hard drives that quietly store sensitive data. Without expert teardown and inspection, these hidden components can easily be missed.
And the risks don’t stop there.
Unsecured IT equipment awaiting transport or storage—especially if not pre-wiped—poses a huge vulnerability. Devices can be stolen, accessed, or tampered with before proper sanitization occurs. One moment of carelessness can lead to years of litigation and public fallout.
Where ITAD often goes wrong:
- Copiers, printers, and smart devices with hidden memory
- Unsecured storage areas for decommissioned devices
- No final audit before disposal
One overlooked device can trigger a breach report and invite regulators.
What a Fully Compliant ITAD Program Looks Like
To avoid fines and protect client data, financial institutions must:
- Track every asset: Even embedded drives in printers and networking gear.
- Destroy all data: Use NIST 800-88 or DoD 5220.22-M methods—wiping, degaussing, or physical shredding.
- Lock down chain of custody: From device removal to final destruction.
- Provide Certificates of Destruction (CoDs): Serialized and audit-ready.
- Recycle responsibly: Through certified e-waste channels (e.g., R2v3).
Key IT Asset Disposal Regulations for Financial Institutions
To stay compliant and avoid similar catastrophes, financial firms must understand and adhere to these critical regulations:
Gramm-Leach-Bliley Act (GLBA)
- The GLBA, enacted in 1999, mandates that financial institutions protect consumers’ private financial information.
- Its Safeguards Rule requires firms to implement security measures to prevent unauthorized access to customer data—including during disposal.
- Improper handling of obsolete IT assets can lead to data exposure, potentially resulting in non-compliance fines and loss of customer trust.
- Learn more about the details of the GLBA in this blog.
Sarbanes-Oxley Act (SOX)
- Following major corporate scandals, SOX was established in 2002 to enforce financial accountability.
- Sections 302 and 404 require strict internal controls over financial reporting, while Section 802 criminalizes improper destruction of business records.
- SOX requires financial institutions to have clear policies ensuring IT assets and records are securely destroyed when no longer needed, preventing regulatory violations and legal consequences.
- Learn more about the details of the Sarbanes Oxley Act in this blog.
Federal Financial Institutions Examination Council (FFIEC) Guidelines
- The FFIEC sets standards for financial institution oversight, including IT asset security. These guidelines emphasize the need for a comprehensive data destruction strategy aligned with an institution’s information security program.
- Failure to properly destroy sensitive data can result in breaches, compliance violations, and federal scrutiny. Learn more about the FFIEC guidelines in this blog.
Securis: Your Partner in Secure and Compliant Financial ITAD
Compliant IT Asset Disposal (ITAD) isn’t a checkbox. It’s a business imperative. Ignoring GLBA, SOX, and FFIEC guidelines can lead to financial losses, legal consequences, and irreversible damage to customer trust. As Morgan Stanley’s case demonstrates, oversights in IT Asset disposal can be catastrophic. Working with a certified, experienced partner like Securis ensures every step is accounted in your IT asset disposal.
Securis Offers:
- Thorough data sanitization that exceeds industry standards and meets all compliance standards
- Secure chain of custody to prevent tampering or loss
- On-site shredding and destruction options for maximum security
- Audit-ready documentation, including Certificates of Destruction to prove compliance every time
- Triple Check at every step to ensure nothing gets missed
- Value recovery program to make sure you get a maximum ROI for retired assets with a residual value
- R2v3 Certified IT Recycling to ensure minimal environmental harm from any asset that can not be re-used after sanitization.
- NAID AAA: This compliance certification sets the benchmark for secure data destruction. NAID audits service providers unannounced to validate ongoing compliance.
- Compliance with all Financial Industry data destruction standards such as GLBA, SOC, and FFIEC
Partner with Securis: Secure, Accurate, Sustainable
Secure IT asset disposal isn’t a checkbox—it’s a mission-critical function. One misstep can cost your business millions.
Whether you’re a credit union, investment firm, or national bank, our team understands how to meet financial industry regulations—and exceed them. Let Securis help you build a bulletproof ITAD strategy that meets financial compliance requirements and prevents catastrophic failure.
📞 Contact us today to schedule a no-risk consultation. Your reputation depends on it.
FAQ: ITAD for Financial Institutions
Why is ITAD so critical in finance?
Financial firms handle high-value, highly regulated data. Improper disposal can lead to data breaches, lawsuits, and massive fines.
What regulations apply to financial IT asset disposal?
GLBA, SOX, and FFIEC guidelines all require secure handling and certified destruction of any data-bearing equipment.
What are the most common mistakes financial services companies make with IT Asset Disposition?
Overlooking hidden drives, storing old equipment in unsecured spaces, and working with uncertified vendors.
How does Securis reduce risk?
With compliant shredding methods, sealed chain-of-custody transport, detailed reporting, and audit-proof documentation.
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