Banking in the Cloud: 4 Security Concerns and Considerations

Banking in the Cloud: 4 Security Concerns and Considerations

By Banking CIO Outlook | Tuesday, November 19, 2019

The unique needs of the evolving banking sector demand special cloud security provisions that are innovative, yet relevant.

FREMONT, CA: Banking services are currently trying to navigate through a complicated maze of disruptive new technologies and perpetually evolving regulatory norms. Cloud technology offers some highly relevant features that can help modernize the banking sector. However, the way cloud functions for other industries is quite different for how it needs to work in case of banking services. While security concerns impact all industries, banks are often seen carrying the biggest burden when it comes to security lapses. Similarly, banks are always under scrutiny regarding regulatory compliance. These factors necessitate cloud service providers to enhance their offerings and orient cloud technology towards modern banking requirements. Some ways in which cloud can help secure banking are listed below.  

• Extensive Encryptions

Encryptions play a vital role in safeguarding cloud services for the banking industry. In making cloud secure for storing and processing sensitive data from banks, various methods of encryption have played a role. When data is transferred to the cloud, data owners can generate encryption keys that will secure the data from being accessed by anyone else. There are various encryption tools available today- some provided by the cloud technology providers, and others by third-party vendors. Encryptions like Bring Your Own Key (BYOK) enable banking companies to create and control their encryption keys entirely.

• SaaS-based Security

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Security for cloud-based banking gets a major boost with SaaS offerings. Banking firms moving to the cloud need to be provided with SaaS security solutions that protect sensitive data and make privacy controls easier. A wide range of SaaS security offerings is available in the market today. Hosting banks on the cloud is expected to get easier as service providers make their platforms flexible, thus enabling compatibility and interoperability of third party solutions.

• Reliable and Certified Hardware

The security concerns that line cloud computing are not limited to cyber-attacks or network intrusions. Some of the vulnerabilities stem out from hardware, as well. Computational and storage facilities that form the core of cloud computing are regarded to be highly safe. However, for cloud banking, the hardware needs to be reevaluated and checked for possible loopholes that might invite attacks. Sophisticated, standardized servers and cloud storage are integral to make cloud-based banking free from microarchitectural attacks. These measures form the first layer of security protection and ensure every hardware component is executing functions without falling prey to secret attacks and bugs. Virtualization of banking services should not take the focus off subsystems that still form the core of operations. Cloud service providers should prioritize certifications and take requisite permissions before extending services to banks.

• Regulatory Management Tools

Regulatory measures are quickly becoming the stumbling block for banks that are considering shifting to the clouds. These regulatory concerns emerge from the potential risks that cloud technology presents. To make cloud banking viable, cloud service providers are expected to develop tools that not only help secure banking models but also ensure compliance with regulatory frameworks. Cloud platforms with inbuilt regulatory compliance tools make compliance extremely simple for banking companies. Simply by subscribing to a few tools, banks can manage the changing regulatory norms in a cost-effective and efficient manner.

Reconfiguring and customizing private, public, or hybrid cloud for banks should be inclined more towards working out security roadblocks and easing regulatory compliance. As banks abandon incumbent systems and shift operations to the cloud, security will be the talking point.

Check out: Top Cloud Companies in Europe

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