Enable compliance and enhance security with the cloud
While many industries have wholly adopted cloud technology, one sector lags far behind. The financial services industry has been much slower to switch to the cloud due to both security concerns and complex regulatory requirements. However, as financial services companies become more aware of the risks and challenges involved in transitioning to the cloud, cloud technology becomes more secure, and data protection and auditing controls improve, adoption of the cloud by this final holdout is on the rise.
Cloud regulation compliance
The regulatory requirements surrounding cloud computing are a double-edged sword. On one hand, switching to cloud computing enables you to more easily comply with many regulations, such as the regulation instituted after the 2007 financial crash that requires equity traders to keep recordings of all phone calls for five years. It also increases your security, helping you avoid data breaches and the accompanying regulatory nightmares.
But on the other hand, ever-evolving complex and obscure regulations must be tracked, adopted and complied with. SOX, HIPAA, PIC DSS and FISMA all have stipulations regarding how businesses must work to secure their customers' information. The bottom line of compliance with these labyrinthine provisions is simply security. Here are a few methods you can use to achieve sufficient security for customer data, comply with government regulations and increase your company's operating efficiency.
Encrypted cloud service
According to Fintech Weekly, 80 percent of financial organizations are highly concerned about unauthorized account access and account hijacking. To combat this, cloud service providers provide complete encryption solutions. By centralizing encryption procedures, unauthorized access can be better prevented, and exposing sensitive data from active or expired accounts or missing security threats from hackers or employees is less likely. Intruders are blocked by the provider's established security protocol, instead of being able to potentially exploit vulnerabilities that low-tech financial organizations may not even know exist.
Pre-migration data encryption
However, financial companies adopting the cloud should remain aware that security is a partnered task. While the cloud provider assumes responsibility for ensuring the integrity of the cloud, the company itself is responsible for the secure encryption, authentication and transmission of the data it is uploading to the cloud. Encrypting data before migrating it to the cloud will help protect against attacks while it is in transit. While a service provider may offer to encrypt the information, it is generally more secure if the company encrypts the data itself before sending it to the cloud.
The cloud can also increase the security of data through two-factor authentication on two fronts. Two-factor authentication works by requiring input from two of the following three categories: knowledge, possession and inherence. A hacker who gains access to a customers’ cloud accounts can wreak havoc on their lives. If a company requires its customers to input a code from a one-time text message to gain access to their accounts, for example, the hacker will be unable to access the account without access to the customer's device.
By centralizing encryption procedures, unauthorized access can be better prevented, and exposing sensitive data from active or expired accounts or missing security threats from hackers or employees is less likely
Two-factor authentication also comes into play with the company's cloud service provider account. Requiring more than a single piece of information or password will help ensure that only authorized users can access customer data. For instance, AWS provides multi-factor authentication for all device types, allowing an organization using the cloud to add an additional layer of security to its data.
Keep sensitive materials on-site
Although storing information in the cloud can make regulatory compliance easier for you and vastly increase your company's profitability, a hybrid solution can provide optimal security. If you have vital data that would endanger your company were it to be exposed, or data that is illegal to keep in the cloud, you should opt to store it on-site.
While the cloud does not completely eliminate cyber threats, it does offer a significant degree of protection. A recent CNBC report details ransomware, one of many threats facing cloud-leery firms. In a ransomware attack, data is encrypted by a hacker and remains inaccessible until the victim pays to regain access. While this risk still exists in the cloud, the leading providers in the field have invested much larger amounts into security than any small corporation possibly can, greatly mitigating the threat.
Cloud services for financial companies are not fail-proof. Financial firms can, however, be increasingly optimistic about taking advantage of the security afforded by the cloud, as both technology and regulations work in tandem to make off-site data storage more secure. Many providers offer services based on the infrastructures of leading information technology organizations that can help your organization enjoy the security of the cloud. Public, private and hybrid clouds can be customized to meet your needs, and your IT infrastructure can be modernized with virtualization, network management and secure migration.