At a time when it’s commonplace to store our photos and even our financial documents in the cloud, many financial services firms wonder if they too should embrace the cloud for enterprise-wide solutions and to improve customer service. Banks pride themselves on having security that’s second to none. But now they’re being pushed to take a more flexible “plug and play” approach to technology that involves shifting to a world populated by state-of-the-art cloud storage solutions and app-based services that are created by innovative technology partners.
Online fintech magazine BobsGuide writes, “Cloud innovation is fast becoming a fundamental driver in global digital disruption and is increasingly gaining more prominence and cogency with banks. In fact, it is predicted that by 2020, a corporate no-cloud policy will become as rare as a no-internet policy is today.” In the past two years, “the cloud has transformed from being perhaps the most frowned-upon technology in the banking industry, due to security and regulatory concerns, to an area of growth, opportunity and better client experience.”
Banks know the cloud can help them become more agile, innovative, and accessible. But executives can’t help but ask themselves: Is the cloud is genuinely safe? University of Maryland Assistant Professor of Computer Science and Electrical Engineering Haibin Zhang explains on The Conversation, that cloud security depends on who has the key. Just as the most secure home would have only one high-quality key in the possession of the owner, the same is true of the best (but not all) cloud solutions. Zhang writes, “Most services keep the key themselves, letting their systems see and process user data, such as indexing data for future searches. These services also access the key when a user logs in with a password, unlocking the data so the person can use it. This is much more convenient than having users keep the keys themselves. But it is also less secure: Just like regular keys, if someone else has them, they might be stolen or misused without the data owner knowing. And some services might have flaws in their security practices that leave users’ data vulnerable.”
In other words, cloud services come in many varieties. Just like cars, there are basic models and there are high-end automobiles. In cloud solutions, the best solutions have bank-level security, 2048-bit SSL/TLS encryption, and only the end-user can decrypt and view their data.
Research by Gartner Inc. suggests that financial services firms won’t be able to avoid adopting the cloud for much longer. Gartner notes that by next year, more than 30 of the top 100 vendors’ new software investments will have shifted to a model of being cloud-only instead of cloud-first. Against that backdrop, financial services firms should make it a priority to assess what cloud solutions they need and research which solutions have the security they rightly demand.