Cloud technology’s upsides have paved a way forward for businesses across industries to deliver customer-facing benefits faster than ever before. But the financial services industry has been slow to adopt the cloud due to a fear of regulation and because of data security concerns.
Recently, however, it seems that advanced technologies and fierce competition are bringing down this “wall of fear” for financial services companies. Data is the most valuable and businesscritical asset for the financial services industry. When cloud technology was first introduced in the marketplace the industry was hesitant to entrust the cloud with its data. As data security has become a vested interest, transparency and trust are now mission critical to every organization. Fears surrounding cloud security have been relieved through the use of upgraded technologies including encryption, tokenization, strong authentication and the ability of applications to produce eventmonitoring files, also known as audit logs. These are examples of areas where vendors have made great progress and now provide financial services companies with the foundation they require for compliance. Financial services companies face regulatory requirements set by entities such as the PCI Security Standards Council, the Federal Financial Institutions Examination Council, the Financial Industry Regulatory Authority and the Financial Conduct Authority. In addition, they are subject to the New York Department of Financial Services’ Cybersecurity Regulation. They are also subject to foreign laws. Overseas, the impending General Data Protection Regulation is a new law that changes the way organizations collect, store and use the personal data of European Union citizens. Financial organizations will now face compliance challenges, with GDP R fines reaching 4 percent of annual turnover or 20 million euros. Given this development one would expect that the financial services industry would now, more than ever, fear cloud technology, but that is not the case. Cloud technologies have evolved to help achieve organizational compliance.