Banks have not yet fully embraced the cloud, amidst fears of data breaches like the Capital One breach that exposed the data of 100 million individuals in the U.S. Though the cloud offers benefits such as accessibility, efficiency, and ease of use, the unique security risks pose a threat to an industry that is historically conservative in nature.
Is Cloud Security the Hot Topic?
The cloud is not necessarily more vulnerable, according to Korbinian Ibel, director general at the European Central Bank (ECB). In fact, the cloud is often better protected than in-house systems. But, the cloud is viewed as a “juicy” target.
Banks have been enlisting the help of tech giants like Amazon and Microsoft to bring their operations to the cloud. Such a move is meant to streamline operations, cut costs, and move beyond legacy operations. But, when a breach occurs, eCommerce giants like Amazon contend that clients (such as banks) are ultimately responsible for their own apps, thereby eschewing blame.
Hackers are able to inject malware that may cause a bank to lose data, as in the case where hackers accessed the ECB’s Integrated Reporting Dictionary site; the site had been breached late last year and had been hosted by a third-party provider.
This presents a conundrum of third-party providers that banks (or any firm) may link up with to tap expertise. Who then is responsible for the data breach, in such circumstances? And is it the bank’s reputation on the line? (Many say yes.)
While the cloud seems to come with inherent security risks, it also brings convenience, streamlined processes, and access. Many argue that the security risks are not all that more severe from the security of local software, just that the risks are different in scope. Cloud software does enhance the consumer experience, providing a cleaner, faster, user-friendly experience.
But as long as there is technology, there will be hackers and malware to be wary of. Determining the right level of risk for your specific operation, and protocol for handling inevitable security breaches, is just as important as choosing a software to partner with.
FYIsoft for the banking industry
Banking and financial services are highly regulated and you need to partner with software solutions that understand the unique circumstances of your business.
Learn more about FYIsoft’s financial reporting and financial analytics capabilities, and schedule a brief demo with FYIsoft to see how FYIsoft can work for your industry’s unique needs.