BFSI can strengthen Compliance and Security with Cloud - Rahul Kurkure, Founder & Director, Cloud.in
Today’s customers, across industry verticals have demands that change fast, driving sellers to deliver unique experiences for them to avoid churn. Customers of Banking, Financial Services and Insurance (BFSI) are no different. Having accustomed to digital and personalised service across other industries, they expect the same here as well. They also place equal value to customer experience as much as they give to financial products and services.
The BFSI sector, which was initially hesitant to digital transformation and cloud services, as they deal with sensitive information, saw the numerous benefits of cloud and are embracing it like never before.
However, organisations can benefit from cloud adoption and gain the competitive edge only when they modernise the legacy, on-premise systems. Hence, app modernisation is among key business priorities of any financial institution in this digital era.
Cloud computing delivers numerous advantages, such as better customer relationship management, ensuring regulatory compliance, data analysis and helping in detecting fraud across the financial sector. Financial companies are understanding how cloud technology can be leveraged to meet their business objectives and deliver great customer experience, driving the market growth.
Enhanced Security with Cloud
The public cloud infrastructure provides the much-needed secure environment for financial institutions than on-premise systems. The growing concern of security with cloud technology, among users, is addressed by the shared responsibility model. Cloud service providers (CSPs) take the responsibility for securing the hardware and infrastructure across regions, availability zones and edge locations. They also secure the computing, storage, databases and networking software. The customer or user is responsible for security of its customer data, platform, applications, workloads, operating system and network among others. SaaS (Software as a Service) vendors take the ownership of keeping their applications secure on Cloud.
Financial institutions should follow through their responsibilities along with having thorough knowledge and granular control over the cloud provider’s access to customer data. Organisations have to anticipate and prepare for all security risks and avoid any existing confusion on security responsibility.
Cloud Access Security Broker (CASB) should be leveraged as it is a part of security best practice and extends security controls on cloud. Cloud providers are also delivering data protection and privacy with key management services that can integrate with client-side encryption and with external key managers.
Cloud manages Regulatory Compliance
Regulatory agencies stress the importance of the financial companies’ responsibilities for compliance with all applicable laws and regulations on a regular basis. As business-critical applications also move to cloud with other data, financial services organisations understand the importance of regulatory compliance. Cloud services are primarily designed to comply with the numerous regulatory requirements. Key regulatory considerations regarding cloud adoption demand cybersecurity measures are incorporated too. All related tasks should be included in the contractual agreement between the organisation and the CSP, which can be customised according to meet the local regulatory compliance as well. Customer data policies and procedures are automated and updated regularly by cloud-based tools. Third-party or vendor management, such as outsourcing as a function to the CSP or vendor does not mean the institutions stop being responsible for compliance with applicable securities laws and regulations. They have to collaborate with various stakeholders to design and implement relevant measures. The frame-work of the cloud enables banks and financial organisations to automate regulatory reports, with regulatory strategy and incident handling in place.
With the cloud providing greater business resiliency, financial organisations can thereby be assured of business continuity.
BFSI sector can adopt cloud technologies and cloud native domain-driven architecture with containerisation, to effortlessly meet the ever-changing regulatory demands and enhance security in addition to customer experience. Nevertheless, financial institutions have to ensure configuring and implementing a robust cyber security strategy for protecting customers’ data and key applications while adhering to regulatory compliance.