What does "data encryption" mean in the context of banking?

In the context of banking, data encryption refers to the process of converting sensitive information into a coded format that is unreadable without the appropriate decryption key. This is crucial for protecting confidential data, such as account numbers, personal information, and transaction details, from unauthorized access and potential cyber threats. By using encryption, banks can ensure that even if data is intercepted or accessed by malicious actors, it remains secure and confidential.

The primary goal of encryption is to safeguard sensitive information during transmission or while at rest, ensuring that only authorized parties can read or modify the data. This is especially important in banking, where the integrity and confidentiality of financial transactions and personal customer information are paramount.