Byline Alfredo Rubina, Vice President of Financial Services at SoftServe, the

How to Safely Adopt Cloud Networking

After years of cautious reluctance, a majority of banks and financial service providers are now turning to cloud solutions to digitize their IT architecture and manage big data.

In doing so, they respond to increasing pressure that has emerged in recent years: while market conditions remain difficult due to low or negative interest rates, the demands and expectations of increasingly sophisticated customers are increasing. These, in turn, are served by digital challengers in the financial environment with ever smarter and more user-friendly offers. A vicious circle that the pandemic has further intensified with its digitization push.

Innovation is therefore required. Most companies have realized that the huge amount of data they hold represents a considerable asset. Managed intelligently, it can provide knowledge and information that can be used to react to changing market conditions in real time. Consistent and available data, provided by the appropriate cloud technology, thus becomes an important factor in flexibility and agility.

Always a key factor for banks and financial service providers: cost savings. Cloud solutions allow them to use resources more efficiently and significantly reduce infrastructure, computing power and storage capacity costs. The added flexibility and elasticity also results in significant cost savings.

Along with innovative products and cost savings, many financial institutions also want to deploy modern security-focused applications that offer, for example, machine learning and real-time threat analysis.

But organizations have different needs, and many have already realized that not all cloud platforms offer the same functionality. This is where multi-cloud environments come in. This model allows workloads to be moved between all the clouds in an environment, depending on which platform is optimal at any given time. The multi-cloud model thus represents maximum automation, performance and security.

Nevertheless, financial institutions have so far only moved small projects to a multi-cloud. This allowed them to gain experience and take the first steps in the development of new digital applications. But they are struggling to take the decisive step of moving critical data and applications there, even though they are aware that this would allow them to exploit the full potential for innovation and productivity and give them an advantage over competition. Why is that?

On the one hand, multi-cloud helps financial companies to implement new business models in an innovative and agile way. On the other hand, however, it presents them with challenges in terms of migration, operation and management. This is especially true for organizations with extensive legacy infrastructure in areas such as billing, accounting, availability, disaster recovery, security classifications, and data locations.

For most financial services organizations, the biggest challenge in deploying multi-cloud applications is implementing consistent security policies across all enterprise applications. But security is paramount in a time when business resilience is tested daily.

Why cyberattacks are dangerous for banks

2020 and 2021 have been tough years for the cybersecurity world. Cyberattacks of all kinds are on the rise, posing new security challenges for banking institutions around the world. Ever since the pandemic hit hard in 2020, the changing world we’ve found ourselves in has been especially good for hackers. Meanwhile, technical innovations such as artificial intelligence, self-learning or adaptive malware allow cyberattacks to become more complex.

Banking data is extremely valuable, which makes the banking sector particularly exposed. Additionally, the industry’s digital transition, which includes mobile banking and other online services, has made it vulnerable to cybercriminals. According to a Trend Micro report, ransomware attacks against banks increased by 1318% in 2021. At the same time, fraud cases increased by 238% and data breaches are on the rise. That’s why banking and cybersecurity must work together to ensure data security and protection. Building a technological firewall should be the first step in protecting sensitive data. The next is to embed strong cybersecurity controls throughout the risk management process.

According to GlobalData, growing demand for cybersecurity in the retail banking industry will drive global security sales from $7.9 billion in 2019 to $9.8 billion by 2024.

Cloud Migration Security

Banks and financial service providers have realized that the cloud is more than a technology; it is a place where they can store data and applications and access advanced software applications on the Internet:

  • McKinsey predicts that in ten years, 40-90% of banking workloads will be hosted on the public cloud
  • According to Accenture reports, banks increased their cloud budgets by 9% to 12% between 2018 and 2020
  • Bloomberg expects the number of fintech applications running in the cloud to reach over 80% by 2025

The use of cloud computing technology is an added advantage for the banking industry. However, with the potential for instant identification of potential flaws in banking data security solutions, cloud solutions can also become vulnerable to cybersecurity risks. Institutions should ensure that their cloud infrastructure is configured securely to prevent harmful breaches. Cloud technology offers a variety of security benefits, but when a breach does occur, it’s usually the result of misconfiguration. Institutions should also ensure that they quickly implement security patches when they become available to prevent vulnerabilities from being exploited.

According to the Novios study, there has been a recurring issue of weak or default configuration of cloud-native security controls and default policies, putting business environments at risk. Lack of qualified personnel, complex rules and poor cloud migration planning are the main causes of these problems. According to Cybersecurity Insiders’ Cloud Security Report 2021, 96% of organizations are concerned about cloud security in one way or another. At the same time, 72% of respondents are not at all confident or only moderately confident in the security of their cloud system. Cloud security, on the other hand, is a valid reason to adopt the cloud, as cloud service providers are investing more in security than most multinationals ever could. Security is now an integral part of core business processes for cloud service companies, not just a support function.

How to protect data while traveling

It is crucial to understand that the security of sensitive information does not only depend on high-level cybersecurity structures, as another common source of data breaches is employee negligence. People have become increasingly dependent on quick access to digital information. Remote access to business information has become so easy with smartphones, laptops and tablets that can provide the employee with anytime, anywhere access to information. The risk increases when you travel. Employees should be made aware of the hazards they and the information they carry with them may encounter while traveling, and the steps they can take to mitigate that risk. The risk associated with the potential disclosure of information depends on the nature and sensitivity of the information itself.

According to industry research Shred-It, 47% of business leaders said human error was the root of a data breach in their business. Hackers gain access to valuable data through weaknesses created by lost devices or papers, poor password choices, and other errors. The consequences of this neglect could be dramatic. First, the cost of identifying the breach, investigating the type of information stolen and the people affected by the breach. Depending on the damage, the company may be obligated to compensate affected customers. Second, the effects of a data breach often extend to public or private company actions. Typically, companies affected by a data breach experience a decline in stock prices sometimes even for months. Stolen personal information can also lead to a lawsuit against the institution, causing not only reputational damage, but also astronomical costs and possible jail time.

Companies must therefore ensure that private and work data are separated, for example by using company-owned laptops and smartphones: this prevents messaging services such as WhatsApp from accessing contact data without it. be invited. If mobile devices are centrally managed and equipped with company-approved software, the risk of hacker attacks can be minimized. Access rights should be assigned carefully; administrative rights, for example, should only be granted to employees who really need them. If an employee only has limited rights, cybercriminals can also access less sensitive data.

Overall, employees should be better trained in the use of computers and sign affidavits to protect business and trade secrets. They should store data only on company servers or in the cloud, as locally stored data is lost with the mobile device. To ensure no one can eavesdrop, conference calls and video should be encrypted with randomly generated passcodes and only secure internet connections should be used.

However, there is no such thing as 100% data security on the go. That’s why it’s important to raise awareness of security risks that arise outside of the office.