Cloud technology helps businesses adapt to changing times. It’s a technology that lets you set up a virtual workplace hence making connectivity easy and fast. Businesses and customers enjoy cloud technology because of the advanced capability of day-to-day devices such as smartphones and tablets.
The banking industry is a big beneficiary of cloud technology. However, this technology comes with its number of challenges. Banking faces unique risks when it comes to clouding. Banks deal with more compliance regulations and scrutiny. This means the cloud technology service providers to banks need to create exceptional packages for banks.
Banking security concerns addressed by cloud
- Extensive encryption – Encryption is a necessity in the cloud. Indeed, cloud technology advancement has been made possible by encryption. Data owners, such as banks, will generate the encryption key of their data before sending it to the cloud. Banks get better control of their cloud data. Several encryption methods, as well as encryption keys, are availed by service providers.
- Invest in reliable and certified hardware – The hardware that a bank invests in might be the cause of vulnerabilities. It is, therefore, important that a bank buys the best equipment that limits network intrusions and cyber-attacks. Cloud banking requires regular reevaluation and checking for any weak spots that might be used by cybercriminals. To further protect banks, cloud service providers should prioritize certifications and obtain the necessary permissions before offering banks this service.
- Regulatory management tools – Banks often face hurdles when they want to use cloud technology. Many regulations and conditions must be satisfied by a bank because of the numerous risks cloud technology comes with. Because of this, service providers find themselves developing particular services that comply with banking regulations besides securing the banking model.
- Security as a service (SaaS) – based security – A bank that opts for cloud service should consider SaaS-based solutions. SaaS-based solutions make securing sensitive data and privacy controls easier for a bank. Many SaaS service providers make their services more compatible, flexible, and easier to integrate with third-party cloud solutions.
Benefits of cloud computing in banking
. Reduced cost of IT – The maintenance and management of the bank’s IT system becomes cheaper. When a bank invests in cloud, it won’t need to pay wages for expert staff, the cost of upgrades will lower, and the cost of energy may reduce.
- Ensures business continuity – There are many businesses without cloud backup that simply fizzled out after a cyber-attack. A cloud guarantees a business continues with its operations.
- Easy automatic updates – A business that has a cloud enjoys automatic IT updates. The service fee often includes such updates.
- Scaling of operations – With a cloud service, a business can quickly scale its operations up or down according to its current needs. The bank will not invest in expensive software and hardware whenever it wants to upscale or change its operating system.
Banks are abandoning incumbent systems and streamlining their operations towards cloud technology. While cloud service providers should work to customize their packages to banks, more emphasis must be toward the security of the banking data and operations. Attention should also be given to industry regulations and compliance to avoid a bank running into trouble.