Stakeholders and executives at financial organizations remain undecided as to whether the benefits of cloud computing outweigh the potential risks of entrusting sensitive information to remote servers. With current demands on banks’ IT infrastructure and front, middle and back office staff, and the implementation of Basel IV pushed forward to January 1, 2023, this year may be a good time to transition from ever-growing IT infrastructure. to the cloud
Cloud computing is becoming increasingly attractive and indispensable for financial organizations. The cloud has the potential to completely change the landscape of financial services. Banks can leverage cloud technologies to enhance all of their risk management systems and access fast, high-end technologies as needed. As a result of the move to cloud computing, many services can be provided with reduced initial capital outlay and IT expenses.
The current state of cloud computing allows financial organizations to access any modern core banking system offerings without loss of profitability. This not only allows banks to save costs, but also increases the speed of data processing and improves the quality of the financial services they provide.
Despite potential initial hurdles in deploying cloud technologies, such as security risks, reliability issues, and issues with business continuity planning, the additional flexibility and scalability that the cloud provides are easily outweighed. You grow the negatives. If an organization can ensure effective corporate governance and security by performing vigorous endpoint management and IT policy management, the cloud will provide many security benefits.
Security Benefits of Cloud Computing
Some IT professionals still overlook the fact that data can be more secure in the cloud than in a physical data center. They continue to view data that has been stored in the cloud as a vulnerable asset, raising security, privacy, and compliance concerns.
It’s true that some engineers are so focused on getting to the cloud that they initially don’t spend time setting up security, governance, and auditing. At best, the organization only has to deal with a permissions nightmare, but incorporating proper governance will still be a painful and expensive process. In the worst case, neglecting security in a cloud rush can result in a data breach or the removal of all IaC (Infrastructure as Code for automating cloud resource deployments) and backups.
The cloud is very different from a traditional data center, and as a result, banks must approach their data management differently. Otherwise, the cloud could end up being an extra expensive data center should financial companies decide to incorporate their legacy technology.
Cloud computing has the resources to ensure high levels of security and prevent data breaches, but it is imperative that an organization implement vigorous endpoint management and IT policy management to gain maximum benefit.
The cloud uses a unique key to encrypt your data
Unlike traditional data centers, which typically rely on physical defenses to prevent unauthorized access to data, public clouds, such as Amazon Web Service or Microsoft’s Azure, allow 256-bit server-side encryption to protect files. These files remain encrypted when they are transferred within the network or saved to cloud storage.
Data objects sent to the cloud server by the client/user are also deduplicated and compressed. In this case, if a third party were to gain access to the data, they would be forced not only to decrypt the objects without the 256-bit AES (Advanced Encryption Standard) encryption key, but also to decompress and reassemble them into readable files. .
High-performance file access is provided and protected through caching servers
When high-performance access to a file is required, the cloud infrastructure can be modified accordingly by implementing physical or virtual cache servers. As with traditional file servers and NAS (network attached storage) devices, these servers cache only the active files needed for high-speed local access, reducing storage needs and costs.
Cloud storage data and metadata is encrypted and is not available in its ‘at rest’ format, so a cache server is required to access it. This server, in turn, provides its own additional security, such as closed unused protocol ports, no open back-end access, additional encryption between the client and the directory server, and self-encrypting drives.
Lightweight Directory Access Protocol authentication policies
The same trusted authentication procedures and access tools as in an on-premises data center can be used for cloud deployments. For example, remote data access can be provided via standard file sharing protocols, such as Server Message Block (SMB) 1, 2, and 3 or Near-Field Communication (NFS) v3 and v4, in exactly the same way. than if it were a traditional file. Servers or NAS (Network-Attached Storage) devices were used.
Additionally, AD (Active Directory) permissions, which are controlled by the bank’s system administrator, manage data access. An authenticated user can access only the data that is visible to them, and the rest of the data is protected through specific user or group policies. Additionally, support for Active Directory trust relationships enables the creation of logical links and the enforcement of policies between users and domains within the system.
Immutable and unalterable file data with infinite version histories
The cloud easily surpasses the capabilities of traditional data storage when it comes to data protection against accidental or intentional errors and system failures that would otherwise lead to data corruption.
Writing data to cloud storage is done using a Write Once Read Many (WORM) model, in which new data is always added (added to existing data) and never replaced or overwritten. The system creates data snapshots at assigned intervals so that any data set can be instantly recovered in the event of any server-side or related issues.
Cloud data centers are highly certified and regulated
Third-party regulations and certifications ensure data security. All public cloudsWhat aws, Azureor GCP, must go through extensive third-party certifications, such as HIPAA, HITECH, Soc2, PCI, and ITAR, to ensure that all data is properly protected.
Consequently, they meet important audit and compliance requirements. If a financial institution transfers your data to the cloud, it will automatically meet all of these requirements. If a financial institution transfers your data to the cloud, it will automatically meet all of these requirements.
Popular file security solutions support cloud-based storage
In the past, many file and data security solutions (such as firewalls and antivirus software) only supported traditional NAS (network attached storage) software to detect and stop cyber threats. Today, the same integration capabilities are available when using cloud-based file storage. .
Cloud solutions now allow for high levels of flexibility when it comes to integration. This gives banks the ability to find and isolate sensitive data, visualize data access, adopt and manage a least privilege access model, and streamline compliance activities.
In addition, it enables financial institutions to securely store unstructured data in local or public cloud storage, where the cache server, as an additional layer of protection, processes actively used data whenever access is required. high performance.
Importance of cloud computing security in 2022
Working with a local deployment creates a false sense of security due to the perception that the network itself is protected by a physical boundary. However, only the most sensitive networks work in an “airspace mode” without any external access. Of course, providing remote access opens systems up to certain cybersecurity risks, but in the cloud, there’s also less risk of misconfiguration, and all of those risks are more easily mitigated by using standard security features, infrastructure, and tools. standard security audit.
While cybersecurity risks exist in both on-premises and cloud environments, cloud systems are better protected than on-premises or data center deployments. It is notable that many of the recent major attacks occurred on local networks or hybrid environments rather than purely cloud-based systems.
A well-functioning cloud solution reduces cybersecurity risks by using a standard set of cloud services and technologies, which pose less risk of penetration than non-standard on-premises or hybrid networks.
Bank risk management functions will receive tangible benefits from cloud computing, but leaders of banks’ risk departments still face significant challenges moving to the cloud. With the number of cloud adoptions in finance increasing, managing a finance organization should not minimize the importance of security, governance, and auditing from day one. Failing to take these factors seriously will certainly lead to disruption of business operations and could damage the reputation of the organization due to financial and legal problems.
To prevent disasters and secure a bank’s data in the cloud more effectively, they need to set up multiple layers of security. For large banks and other financial organizations, it’s best to set up risk management features with a private cloud provider. Small and midsize businesses, on the other hand, would benefit from leveraging public cloud service providers to grow their business and securely connect data. For highly secure operations, it is better to use a private cloud. If you use a public cloud for the top layer of your organization’s operations, a hybrid cloud solution might also be a good option.
Additionally, hosting a cloud storage system in your own data center within a secure perimeter can be just as efficient for your organization. Private cloud solutions deployed in a private data center have all the benefits of public clouds, including 256-bit encryption, compression, deduplication, and modular building blocks that can scale at comparatively low cost.
By partnering with compatiblefinancial institutions can ensure that they are always in control of their sensitive corporate and private information, and that they comply with current and future regulatory capital requirements.