April 12, 2023 | By Greg Dougherty
Financial institutions, banks, accounting firms, credit unions, and hedge funds may struggle to stay compliant and protect themselves from the rising frequency of cyberattacks. According to IBM’s 2021 Data Breach Report, the total cost of a data breach increased by 10% last year, the highest jump in over seven years.
DYK? The average cost of a data breach is now $3.92 per compromised record, up from $3.86 the year prior.
Thankfully, cloud technologies offer some protection. A recent study by Ponemon Institute found that when organizations move sensitive or confidential data to the cloud, the cost of a data breach falls by 22%.
This rise in cybercrimes is especially concerning when you consider the significant costs associated with these occurrences. Data breach costs rose from $3.86 million to $4.24 million over the same period, the highest average total cost in the history of the IBM report. But unsurprisingly, costs were higher for organizations that lagged in areas such as security AI and cloud security.
The Ponemon study also found that the average time it took to identify and contain a data breach was 197 days. Once again, this number varied depending on the preparedness of the organization. For organizations with mature security practices in place, the average time to identify and contain a data breach was shorter, at around 145 days.
This highlights the importance of having a cloud security strategy in place. And while a move to the cloud can be daunting, it’s important to remember that not all clouds are created equal. Financial institutions should consider a hybrid cloud solution, which offers the best of both worlds: the security of on-premises solutions and the scalability and flexibility of public cloud.
Data security may be top of mind for financial organization IT teams, but getting the buy-in from your c-suite on the added investment costs can be tricky. When so many companies are working to reduce their costs and protect their bottom line, your team needs to explain the benefits of investing in cybersecurity.
#1 advantage of #HybridCloud for #FinancialServices: Organizations that leverage hybrid cloud environments had the lowest average total cost of a data breach. Get the rest from @Opti9Tech here: Click to Tweet
The truth is that hybrid cloud for financial services offers peace of mind that can’t be found within old processes. This approach not only protects your sensitive data and operations but also sets you up for long-term success with a managed cloud services partner.
The advantages of a hybrid cloud solution for financial services are extensive. Today, we look at five specific ways you’ll see the added value by implementing this software in your own organization.
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Companies leveraging hybrid cloud solutions in financial services can:
- Secure mission-critical data and applications and promote business continuity.
- Meet strict compliance standards.
- Reduce Latency.
- Shift cloud environment accountability.
- Increase cloud environment performance and uptime.
Read more: Top 5 Reasons Why Outsourcing to a Cloud Provider is Beneficial for IT Managers
Hybrid Cloud Solutions for Financial Services Offer Greater Security
For financial and banking companies, security and data protection are paramount, especially since they are one of the most targeted industries when it comes to cyberattacks. The total cost of a U.S. financial sector data breach was $5.72 million in 2021. Malicious attacks caused 52% of those data loss events, system glitches accounted for 25%, and human error made up 23%.
Unfortunately, 2022 has yet to bring any relief where cyberattacks are concerned. In response, many institutions are finding ways to improve their security posture, such as:
- Testing security
- Deleting redundant data
- Spending more money and time on Cyber-security
- Establish strong passwords
- Update your programs regularly
While IT teams in the financial space have to allow information to move across multiple locations, working with a cloud provider can provide access to a fully monitored and secure cloud environment to house necessary data and applications. How secure?
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According to Gartner, banking and financial service enterprises spent $596B globally on information technology.
A report on data security showed organizations further along in their cloud modernization strategy contained a breach on average 77 days faster than those in the early stages or completely lacking in their modernization journey. That same report shows those who took advantage of hybrid cloud environments had the lowest average total cost of a data breach by 28%. What this means for you is that the further into your cloud migration you are today, the better. Further, if you haven’t started that migration yet, you’re already behind.
Bottom Line? Financial institutions have a responsibility to protect their customers’ data. And with cybercrime on the rise, it’s more important than ever to have a robust security strategy in place. A hybrid cloud solution can offer increased security for your organization. By having your sensitive data stored in a private cloud, you can keep it away from prying eyes. And with the help of a service provider like Opti9, you can be confident that your data is safe and secure.
Hybrid Cloud Solutions for Financial Services Ensure Compliance
Financial institutions follow strict data protection standards due to the sensitive transactions and information they process and conduct. While the regulations and restrictions around financial data protections have always been strong, there has been renewed pressure on organizations and federal agencies to enact more privacy protection laws. A growing threat of cybersecurity attacks for the financial industry has prompted several federal-level compliance requirements with expensive associated penalties:
- Federal Information Security Management Act (FISMA)- requires companies to monitor sensitive data continually and reduce risks associated with data breaches by implementing standardized IT security controls.
- Payment Card Industry Data Security Standard (PCI DSS)- ensures financial companies’ processing, storing, or transmitting cardholder data maintain a secure environment.
- Sarbanes-Oxley Act (SOX)- necessitates that institutions monitor, log, and protect electronic financial records and take responsibility for the accuracy of that documentation.
The aforementioned compliance requirements dictate what can and can’t be hosted in public cloud services. But these regulations require further time and energy in monitoring by you, the organization. The good news — hybrid cloud services not only ease migration between public and private clouds but allow administrators greater control over what information is housed where.
Managed cloud service providers design and update their environments to meet stringent and ever-changing compliance needs. This enables financial organizations to focus on their day-to-day operations instead of continually updating their infrastructure stack to adhere to those standards.
Bottom Line? Financial institutions are subject to a variety of regulations, such as Sarbanes-Oxley (SOX), the Health Insurance Portability and Accountability Act (HIPAA), and the Gramm-Leach-Bliley Act (GLBA). A hybrid cloud can help your organization stay compliant with these regulations. With a private cloud, you can control who has access to your data and ensure that it remains secure. And with the help of a service provider, you can be sure that your cloud solution meets all the requirements of your specific regulatory body.
Hybrid Cloud Solutions for Financial Services Reduce Latency
Investment firms often struggle to achieve the IT connectivity speeds they need to stay competitive and ensure they can process transactions within fractions of a second. While remote data centers can be less expensive to operate, they also can create latency problems that can hinder business success.
Instead, firms would be better off leveraging cloud services from providers with data centers hosted in locations closer to them. This supports lower latency and higher-frequency trading. By staging multiple environments via hybrid cloud, and automating testing and backup operations, even the largest financial service providers can be more agile and resilient using hybrid cloud solutions.
Bottom Line? The financial services industry is constantly evolving, and businesses need to be able to adapt quickly in order to stay competitive. A hybrid cloud can provide the agility and flexibility your organization needs. With a hybrid cloud, you can quickly and easily scale up or down as needed. This allows you to respond to changes in demand and keep your business running smoothly.
Ensure #compliance with the most up-to-date federal regulations by leveraging #HybridCloud. What else can @Opti9Tech do for Financial Service providers? Read more: Click to Post
Hybrid Cloud Solutions for Financial Services Offer Shared Responsibility
Financial organizations will have varying responsibilities for their environment depending on the cloud service provider’s company solutions offered. Some service providers often cover physical damage to the data center but leave most accountability on the customer in a self-service type model.
On the other hand, managed service providers take a more hands-on approach to cloud authority. The hybrid cloud environments allow the customers to shift the responsibility and work of running hardware and software infrastructure to the actual cloud providers. Hybrid Cloud, and the providers, allow their clients a bespoke level of service at the hands of a connoisseur in the industry.
Financial sector companies working with managed cloud partners receive access to a team of experts that take full ownership and accountability for the entire infrastructure stack, allowing businesses to focus on their core growth objectives.
Added Bonus Bottom Line? TCO: The average total cost of ownership (TCO) for a hybrid cloud is lower than the TCO for either on-premises or public cloud solutions. This is due to the fact that a hybrid cloud can be tailored to meet the specific needs of your organization. With a hybrid cloud, you only pay for the resources that you need, which can lead to significant cost savings.
Hybrid Cloud Solutions for Financial Services Offer Continuous Development
As if the likelihood of cybercrime risk isn’t enough stress, on top of this, organizations are struggling with a gap in their skills due to a highly competitive labor market. Current industry trends are showing how challenging it can be for banks to recruit, retain, and train staff that is skilled with the most in-demand cloud platform management skills.
Managed service providers that partner with cloud platform providers help financial services firms to address their skills gaps. How?
The right vendor can provide the skills coverage necessary for migration success even if these skills are lacking within your existing staff, or until you have new staff fully trained. They also provide long-term support to banks or insurers with the necessary skills and finance industry expertise.
Added Benefit for Users: When it comes to the cloud, user experience is key. Financial institutions need a cloud solution that is fast and easy to use. A hybrid cloud can provide a seamless user experience for your employees. By combining the best of both worlds, you can create a cloud solution that is simple and easy to navigate.
Additional Cloud Solutions for Financial Sector Businesses
Financial institutions looking to meet compliance, security, and performance goals should consider working with a managed cloud provider for a multitude of offerings, fit for your specific industry. Ideally, you’ll need to find a partner that offers the following hybrid cloud financial services:
- Disaster Recovery-as-a-Service (DRaaS)– Ensured business continuity in the event of natural disasters, outages, breaches, or other forms of data loss.
- Backups-as-a-Service (BaaS)– Redundant, reliable, and secure backup, storage, and recovery for mission-critical data and applications on a fully managed off-site infrastructure.
- Private Cloud– Highly scalable, customizable, agile, and secure cloud infrastructure customized to meet compliance and redundancy needs.
Find further information and guidance on choosing the right managed cloud solution for your business. Reach out to the Opti9 team today.