Why Financial Services Firms Are Turning to Cloud Security

With Salesforce as the first cloud computing SaaS platform introduced in 1999, it has streamlined the way businesses conduct their operations and invented a new and easier way for businesses to interact with customers. Today, most businesses use cloud computing in one way or another. According to Gartner, cloud platforms have an extremely high adoption rate with a 17 percent year over year growth rate, with software as a service (SaaS) accounting for the largest market segment and cloud system infrastructure services (IaaS) following. With advancements in technology, the security provided by cloud platforms is an attribute to its growth and to its increased adoption by financial firms.

What is a cloud platform?

A cloud platform is an Internet-based data center and operating system that allows software and hardware products to co-exist remotely and at scale all from one digital platform online. On a cloud, enterprises have access to compute services like databases, servers, storage, analytics, networking, software, and intelligence and can simply pay for what they use, without the need to set up and own its own data centers of computing infrastructure. 

There are several types of cloud platforms that provide different services such as: 

• Public Cloud which are third-party providers that deliver computing resources over the Internet. Public cloud provider examples include Google Cloud, Microsoft Azure, and Amazon Web Services (AWS). 
• Private Cloud which is a platform that is exclusive to one organization. Private clouds can be hosted by a third-party provider or in an on-site data center.
• Hybrid Cloud which combines public and private cloud platforms. Organizations with a hybrid cloud have more flexibility as data and applications can move seamlessly between the two platforms. Hybrid clouds also help organizations to optimize their infrastructure, security, and compliance. 

More enterprises are looking to cloud platforms due to the data storage, back-up, and security benefits it provides. Could platforms also allow organizations to manage its in one place, analyze the data, embed intelligence into their operations, and scale faster. 

Are cloud platforms more secure?

Cloud platforms consist of policies, controls, procedures, and technologies that provide security to data, applications, and infrastructure. In most cases, cloud platforms are more secure than on-premise software as they offer built-in features such as application security and multifaceted authentication. By allowing users to verify credibility, enterprises add another layer of protection against threats from unauthorized users. Cloud-based user authentication enables companies to access information at anytime and from anywhere, while reducing risk and maintaining control. 

Security measures on cloud platforms are configured to protect data and customers' privacy and support regulatory compliance. It also sets authentically rules for individual users and devices. From filtering traffic to authenticating access, businesses can configure security based on its specific needs and manage the rules in one place. Having one platform to configure and manage in one place enables enterprises to reduce overhead costs and enables IT teams to focus on other areas of the business. 

Why are financial services firms navigating towards the cloud?

Due to the high adoption of cloud platforms and the amount of data that is entered into the cloud, the topic of cloud security has risen. The biggest concerns lie in security, compliance, and governance when it comes to the content stored. Firms that house highly sensitive information are worried by the growing cyber security incidents and data leaks that intellectual property may be exposed accidentally or through cyber attacks. Organizations are now looking to cloud security to safeguard their businesses moving forward. 

The importance of cloud security can be especially seen within the financial services industry, where cloud security concerns are growing rapidly and the need for it has become mainstream. As a result of data leaks and breaches and heightened regulatory and compliance affairs, financial services companies are investing in advanced cloud security infrastructure. This enables them to operate on a cloud platform and environment while ensuring clients and businesses that sensitive financial data can be managed and stored securely. 

Furthermore, financial service companies are turning away from legacy data centers and investing billions to adopt cloud technology. Cloud technology is necessary for financial firms to be agile, flexible, and to better adapt to the rapidly changing threats. For example, the CISO of Equifax, a leading credit monitoring firm, stated that the company invested more than $1.5 billion to convert its system to the cloud to ensure that data security was embedded into its systems. 

For several years, changes to data security have evolved to meet the changing threats. Financial institutions faced sophisticated cyber security and supply chain attacks. For example, in 2017 Equifax underwent a high-profile breach, impacting over 148 million consumers and resulting in leadership and regulator scrutiny. As a result, the company brought on Jamil Farshchi to help overhaul its technology stack  and looked to the cloud to transform its company wide security. 

Farshchi, who is known for helping Home Depot recover from its 2014 security breach, mentioned that the cloud provides companies and customers with "unmatched security layers and controls, greater than anything an on-premise infrastructure can offer." Upon moving its tech stack to a cloud environment, Equifax can view 200 controls in real-time, which is something that could not be done with an on-premise system. Other benefits of using the cloud include having the ability to make changes to its security policies without having to change configuration. 

Due to regulatory and compliance requirements, financial firms have traditionally favored on-premise infrastructure, hosted IT, or private cloud over public cloud. Many organizations are investing more into public clouds, however, as banking and capital markets leaders increasingly recognize the efficiency and security of a cloud infrastructure. The cloud is not only a technology that provides storage and easy access to data, but it's also a destination for banks and other financial services firms to store applications and access advanced software applications via the internet.  

The growing security concerns around data and privacy are driving financial services companies towards a hybrid model with on-premise and cloud infrastructure. As financial firms are increasing investments in cloud infrastructure, the Enterprise Cloud Index Report shows hybrid cloud is expected to grow by 39 percent over the next five years. 

Furthermore leading public cloud providers offer a variety of innovative products-as-a-service that financial teams can access through a platform, such as artificial intelligence hosted on a cloud platform. These platforms can help financial services companies to improve revenue generation, minimize expenses, increase customer insights, deliver products quickly and efficiently, obtain value from enterprise data assets, and help secure sensitive data. Financial enterprises are realizing the benefits that navigating towards a cloud will bring to the firm such as controlling risk, supporting customers better, enhancing operations and customer support, generating valuable insights for financial decisions, and more. Lastly, having massive data sets combined in one secure environment enables organizations to apply advanced analytics for valuable insights that otherwise would take months to obtain. 

The ability to capture, store, secure, and analyze massive amounts of data in real-time is critical for financial firms to remain competitive, drive innovation, and combat financial crime. Additionally, when data is stored in a cloud environment, the granular data from call center notes, credit ratings, criminal records, past claim records, and transactional patterns can be analyzed so that financial firms will be better equipped to effectively and accurately operate the business. 

Types of cloud deployment

Financial services firms can deploy on a hybrid or private cloud. Both are effective deployment options that address security concerns with an accurate model. Security concerns can be addressed during the design and deployment process, rather than after the business has transitioned to a cloud environment. According to Alex Heid, the chief research and development officer at SecurityScorecard, secure deployment lifecycle processes have the proper configurations, combined with continuous external perimeter monitoring both infrastructure and applications. Such a structure will go a long way to identify threats before they become exploited incidents. 

Cloud security deployment depends on the individual cloud provider or the cloud security solutions in place. Implementing cloud security within a firm is usually a joint collaboration between the business and solution provider.

For more information about AI cloud solutions and secured deployment options, get in touch with one of Accern's account executives. 

About Accern

Accern is a no-code AI platform that provides an end-to-end data science process that enables data scientists at financial organizations to easily build models that uncover actionable findings from structured and unstructured data. With Accern, you can automate processes, find additional value in your data, and inform better business decisions- faster and more accurately than before. For more information on how we can accelerate artificial intelligence adoption for your organization, visit accern.com