Many financial institutions are developing new strategies for cutting expenses and improving operational effectiveness. As a result, they increasingly rely on the cloud to update their IT infrastructure to elevate customer experience or speed up access to crucial financial data. It refers to an on-demand computing service that delivers storage, applications, and processing capacity over the internet. The cloud also offers the agility and flexibility needed to meet customers' demands seeking seamless user experiences.

In the information age, cloud computing is rapidly evolving; hence the security of the stored data remains a crucial concern for customers and organizations. As a result, a company that decides to embrace cloud technology or prefers cloud service providers and services or applications without adequately understanding the risks may subject itself to various financial, technical, legal, and compliance concerns. For instance, if data confidentiality is not carefully maintained, it might damage the security system, making it harder to find the error.

Ever-changing risks and vulnerabilities accompany migration to the cloud. However, these are some challenges and risks to watch out for:

Reduced visibility and control

Organizers lose some visibility and control over their operations when they move them to the cloud. It happens because their cloud-based resources reside outside their corporate network and run on infrastructure owned by third parties. This has resulted in a need for more effective cloud-based security tools, which is hard to achieve with traditional network visibility tools. Additionally, the shift in responsibilities based on the type of cloud service model(s) used results in a paradigm shift for agencies regarding security monitoring and logging.

This may make it harder for a company to keep an eye on and defend against external threats to its cloud-based resources. As a result, to manage this data responsibly, financial institutions must deploy extra security solutions that provide visibility across locations, users, and data types. The most effective method is streamlining and simplifying security by utilizing a cloud-independent continuous monitoring platform.

Credentials can be hacked

In the age of cloud-based infrastructure and applications, account hijacking has become a more severe cloud security problem. For example, malicious payload and malware enable the attacker to gain access to a user's cloud credentials. A malicious attacker could also access a cloud service provider administrator's credentials to access the agency's data and systems through cloud computing resources. Once the credentials allow access to provisioning, the cloud service providers can provide additional resources to the financial organization and target assets owned by the financial organization.

More companies are outsourcing data, and IT services to third-party big tech companies, leading to increased service outages and hacks. Hence, the regulating bodies are developing disaster recovery methods to give cloud providers operational resilience if most third-party vendors are threatened simultaneously.

Insufficient due diligence

Insufficient due diligence, or the absence of necessary procedures to assess the trustworthiness of the cloud technology provider, is one of the most prominent & frequenting security problems associated with financial firms transitioning to the cloud. Insufficient due diligence occurs in the financial sector when a financial institution fails to analyze information before making an informed decision or conducting a transaction without fully comprehending it. For example, financial firms transfer data to the cloud without thoroughly assessing its implications, the provider's security procedures, or their obligation to implement security safeguards. The underlying reasons for inadequate or lax security due diligence include a lack of resources, expertise, planning, weak policies or third-party cloud vendors.

Vendor lock-in

Changing cloud service providers poses a vendor lock-in concern for a financial organization. A non-standard data format or non-standard application programming interface (API) and reliance on one cloud provider's proprietary tools and unique APIs lead to higher costs, efforts, and maximum time utilisation. Financial institutions use various features, services, and APIs, which increases their exposure to unique implementations of providers and impacts their choice of provider. Cloud technology vendors' failures can result in data loss or the inability to transfer data quickly to another vendor.

Conclusion

Working with a reputable cloud services provider excelling in financial cloud solutions is the best way to combat these cloud concerns for any financial institution. To guarantee that data is constantly safeguarded, cloud service providers frequently have professionals with cloud security and compliance knowledge. Financial businesses also have access to specialized solutions for maintaining control, flexible technology, 24/7 assistance, and monitoring to guarantee their infrastructure constantly operates at peak efficiency. Financial businesses' ability to overcome these obstacles and profit from cloud computing will be directly influenced by their choice of a cloud services provider with adequate/ required knowledge in space and control measures.

Author:

Praveen Paulose, MD & CEO, Celusion Technologies