Recently, I attended the 2023 Bank Automation Summit, where one of the significant topics of discussion was how banks navigate their transition to the cloud.
The “cloud” refers to a global network of servers, each with a unique function, that works in tandem to enable users to access files stored within from any approved device. The computing and storage of cloud data occur in a data center, rather than on a locally sourced device.
Cloud computing makes data more accessible, cheaper, and scalable. For these reasons, Gartner predicts that by 2025, 85% of enterprises will have a cloud-first principle. However, due to their sensitive and regulated natures, some industries – especially the financial services industry – have had more complicated cloud transformation journeys than others.
Given their unique vulnerabilities, what do financial services institutions need to consider when migrating to the cloud?
Traditionally, information was said to be most secure when separated and segmented. However, the cloud’s structure makes data segmentation more complex and potentially more vulnerable if the correct security measures are not followed. For example, as a start, companies should leverage the cloud for initiatives surrounding verification methods, access security, and anti-phishing training.
A Hybrid Road to a Long-term Solution
Migration to the cloud and data transformation does not need to happen overnight. Especially for larger, older institutions, it might take some warming up to cloud-based applications before adopting them at full capacity. And, many have the impression that everything should move to the cloud, but depending on an institution’s needs, it might make sense for them to keep certain things on premises. Institutions should implement cloud technologies in a way that makes sense for their needs. For many, this means starting their journey using microservices.
Financial services institutions must be hypervigilant regarding where customer data is located, who has data access, and how data is managed in a cloud environment. There are also certain global and regional regulatory considerations for migrating to the cloud in a phased approach, and institutions must have a thorough understanding and awareness of the implications.
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