Addressing Cloud Woes in the Financial Services Firms

Cloud in Finance

Cloud in Finance

Using cloud-agnostic database banks can minimize operational costs.

Cloud computing in recent years has gained rapid momentum powering change across business functions and driving organizations to become more agile. Cloud infrastructures offer a vast opportunity to companies to synchronize their business, break down operational and data silos across financial risks, customer support, regulatory and more. Leading players in the cloud market provide a wide range of advanced products-as-a-service to assist enterprises to deploy business and operating models to improve revenue generation, augment customer insights, deliver customer-centric products and services quickly and efficiently.

In the financial services industry, cloud computing is more than a technology as it allows banks and other financial services firms to store data and applications. It also enables them to access advanced software applications. Unfortunately, many financial services providers are still struggling to keep up with the ever-changing technology landscape. They are even facing a vast set of challenges when considering a cloud migration. 

One of the biggest concerns of cloud migration for banks is security and compliance. Excessive technology debt, lack of consistent, enforceable processes in the cloud; the dearth of executive aids and a clear cloud strategy; and inability to evaluate, predict, and manage the total cost of ownership with precision are other challenges creating blockades while shifting to the cloud.

 

Overcoming Cloud Migration Challenges

Since banking information is extremely sensitive making it valuable and more vulnerable alike, keeping that information secure is of the utmost importance. On the other side, the most common security concern is multi-tenancy, which refers to the data storage on the same servers other companies have their data. Fears around multi-tenancy are largely misplaced and stem from an outmoded understanding of cloud solutions. According to a report from IBM, the average data breach costs a company US$145 to US$154 for each compromised account.

With technology and cloud advancing rapidly, compliance with various regulations and cloud security requirements has also expanded, leaving financial institutions with a challenging conundrum to solve. In order to curb such challenges, banks must ensure their cloud service provider has SOC 1, 2, and/or 3 reports. Obtaining these reports, cloud providers are required to pass a rigorous auditing process with regards to safety and security.

There are also some latest security measures to comply with the most stringent industry regulations, including GDPR, Sarbanes-Oxley, GLBA, and NYDFS.

In today’s digital transformation age, financial services providers must ensure that they have control over their data, have an understanding of where it is located, what data can be migrated to the cloud, and what is required to stay on-prem. Besides this, they must contemplate who has access, and what a normal data workflow looks like.

To answer these questions, financial services firms need to classify their data. This will help them identify all the places their data is located, and assist in determining which data is too sensitive to migrate based on classification rules. By establishing role-based authentication and control, banks can track everything that happens to their data in the cloud and address risks immediately. Moreover, security-focused tools like auditability and automatic notifications can also enable them to detect risks and take robust action.

Although whatever the strategy financial services firms imply, migrating to the cloud requires transitioning and managing extensive processing and workloads outside of traditional IT infrastructure while coping with cloud security, compliance, and other potential challenges.