Cloud computing is gaining popularity across industries, with expectation to exceed $623 billion by 2025, according to industry reports.1 Especially with the COVID-19 pandemic forcing workers to find ways to continue business in an exclusively virtual environment, migrating to and optimizing cloud management is even more essential.
While most industries have made the leap, financial services companies have been slower to adopt cloud-based computing. In general, security is the primary challenge when considering the cloud2, and this is particularly relevant with cloud security for financial services. Due to sensitive data being transmitted back and forth, these companies face a unique cyber security challenge when managing their technology infrastructure in the cloud.
Whether or not cloud computing is appropriate for confidential transactions such as those conducted by financial services providers has been discussed extensively. In this article, explore three reasons the cloud may be more secure than you think:
3 Benefits of Managed Cloud Security for Financial Services
1. Shared Cybersecurity Responsibility
When a financial institution leverages the cloud, the responsibility for cybersecurity becomes split between the institution and the cloud provider. For example, when a company signs on with Amazon Web Services (AWS), AWS manages security of the cloud, and customers assume responsibility for managing security in the cloud.3 As opposed to alternative data hosting sources, where company resources take full responsibility for cybersecurity, the cloud enables staff to lean on the expertise of cloud professionals to ensure data is transmitted safely and securely.
2. Compliance Support
Across industries, regulations and compliance standards are constantly shifting to accommodate new technologies and consumer demands. In financial services, this holds especially true with the large quantities of private data being transmitted on a daily basis.
According to Salesforce, ninety-one percent of businesses have reported that cloud technology is helpful in managing governmental regulatory and compliance requirements4 Leveraging the cloud and a cloud service provider’s industry expertise can help financial institutions stay up-to-date on compliance and security standards. The cloud provides stringent access controls and high levels of data encryption during transmission and at rest, which help organizations meet regulatory standards including PCI DSS, and the EU’s GDPR requirements.
3. Risk Mitigation and Disaster Recovery
Data breaches can be extremely expensive for businesses, costing an average of $3.92 million per breach according to a Ponemon Institute and IBM Security 2019 Cost of a Data Breach report.5 And that number doesn’t include the damage to the brand’s reputation and customer loss as a result of the breach. Cloud providers often notify customers about compliance changes, prepare for demonstrating compliance during an audit, and minimize data access vulnerabilities. In the event of a breach, outage, production failure, or other complication that restricts data access, many cloud providers provide automatic backup and quick recovery features which store copies of data in the cloud.
Financial institutions can use the cloud to improve their speed of service, achieve greater flexibility, and better serve their customers. But managing applications in the cloud is not a single-step process. It takes consistent monitoring and optimization to ensure that businesses are realizing the full potential of their cloud investments. Ensure long-term success and partner with a managed services partner like Velocity Technology Solutions, that can provide the industry expertise and support you need to successfully navigate cloud security for financial services.