Cyber threats are becoming increasingly sophisticated, complex and pervasive, leaving financial institution (FI) and consumer data more vulnerable than ever before. As risk proliferates, it is no longer a question of if an attack will happen, but rather when fraudsters will strike. FIs, as a result, are challenged to keep up with evolving cybersecurity initiatives, IT regulatory compliance demands, and critical disaster preparedness issues – all while staying within budget and focusing on other significant priorities, such as lending and deposit growth.
FIs, especially community and regional institutions, often lack the resources to meet ever-changing regulatory, compliance, and business-driven demands in house. Technology wish lists continue to grow while resources continue to run thin. The booming economy and low unemployment rate make it difficult for FIs to attract and retain top tier IT expertise with the necessary experience and certifications. Budget restraints and decentralized or rural geographic locations only exacerbate this problem. A recent report from Cybersecurity Ventures estimates there will be 3.5 million unfilled security jobs by 2021. To solve for this incredible talent shortage – and to help better manage escalating security threats and complex IT environments – FIs are more frequently looking to the cloud.
When the cloud first emerged on the financial services scene, many were skeptical of its effectiveness and safety; however, this misconception has since largely dissipated. Mounting user acceptance and understanding of the cloud’s security strength and cost-effectiveness has led to more widespread investment and growth of cloud technology, and the industry has now reached an inflection point around cloud services. FIs are choosing to outsource network hardware, technology management, and IT security and compliance responsibilities to trusted experts to gain a more secure operating environment, better business resiliency, more predictable costs, and greater freedom and flexibility to focus on consumer needs.
Not all types of clouds, however, are created equal. While public clouds can be great for hosting certain applications, this type of cloud is not the best choice for the substantial task of running a community institution’s intricate IT infrastructure. Public cloud providers, like Amazon, typically place the burden on the institution to enhance and maintain the security efforts and scope, something that community FIs typically don’t have the time, expertise, or resources to take on themselves. Plus, public clouds can lack the necessary security strength and integrated disaster recovery capabilities necessary in the current environment.
Take the Capital One data breach in the summer of 2019, for instance. This incident was the result of a hacker infiltrating Capital One’s cloud, which is hosted by Amazon. Although Amazon technically provides the cloud environment, the onus was on Capital One to maintain their security posture. While Capital One is a large bank with vast resources at their disposal, the story would likely have ended very differently, and the damage would have been much greater, if it would’ve involved a community or regional institution.
Instead of relying on public clouds, community FIs should consider leveraging a private cloud environment for hosting their infrastructures. Private cloud providers tend to view their relationship with FIs as more of a partnership. They provide the infrastructure, but they can also help ensure a layered cybersecurity strategy is implemented and maintained. Private clouds represent a stronger, more collaborative method for FIs to host their critical infrastructure.
Even though private cloud providers share some commonalities, these third parties also have stark differences. As a result, FIs must conduct proper due diligence into potential partners to find the right fit for their institution. Some key areas of evaluation should include security certifications, business continuity strategies, and service implications.
One especially important area that FIs should consider when evaluating potential providers is the approach to disaster avoidance. Weather patterns can frequently be unpredictable and severe. Times of disaster are also often when consumers need their FI’s support the most. That’s why it’s critical to implement a strong disaster avoidance strategy that enables uninterrupted service in times of trouble.
Savvy FIs are also prioritizing cloud partners that have geographically dispersed redundant data centers from which their networks can operate. Such redundancy helps better establish business continuity and reliability. Not to mention, auditors are often pleased to see such measures, helping to boost an institution’s compliance efforts.
In the age of digital banking and the expectation of “always-on” availability, FIs are increasingly turning to the cloud for stability and to insulate their operations from any disruption, whether it’s manmade or the result of a natural disaster.
While the cloud provides a strong, secure and cost-effective way for institutions to better manage their infrastructure, FIs should carefully consider the differences between public clouds and private ones. Public cloud providers typically can’t offer the same level of collaboration, integrity, and availability compared to private clouds. By choosing the right private cloud provider – one that prioritizes cybersecurity, business continuity, and true partnership – community institutions will be well-positioned to grow and compete with confidence.
Looking for free resources to help you bolster your cybersecurity strategies? Visit our Cybersecurity Awareness Resource page today for tips and helpful sight to elevate your #FIcybersavvy!
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