Cloud technology has lost some of its mystique in recent years, and consumers’ improved understanding has led to a boost in demand. The cloud computing services market was expected to see 17.2 percent growth and reach a global value of $200 billion by the end of 2019. The final figures have yet to be tallied, but it is clear such tools and software are viewed as essential to quickly transferring data.
The financial world is also interested in cloud computing, but a few laggards have yet to shake off myths about its security and usefulness. The technology’s adoption in the banking sphere has risen steadily over the past several years as its capabilities have become more transparent, sophisticated and — most importantly for financial institutions (FIs) that need to protect consumers’ and corporates’ financial information — much safer. Security concerns were some of the top reasons FIs avoided moving their data to the cloud in the past. Still, many are now integrating such technology for added fraud protection and cybersecurity.
Cloud computing could bring many benefits, but credit unions must keep cybersecurity top of mind when integrating with it. It can reduce CUs’ overhead and infrastructure costs while improving their IT departments’ productivity, but FIs need to be sure that data is kept safe. A hybrid cloud model could offer both the flexibility of scale and the security these entities need.
Private versus public cloud concerns
Cloud security trepidations date to the dawn of the internet, when sharing information in this manner was completely unheard of among banks, businesses and CUs. Cloud-based systems quickly proved capable of overcoming private data servers’ weaknesses, like difficult platform scaling and reduced member access, and adoption of such systems slowly grew. The introduction of private cloud models — which, unlike public cloud models, were generally inaccessible to the online world — did much to make cloud computing more attractive to businesses and financial services firms.
Neither model completely fulfills CUs’ needs, however. Credit unions cannot simply store their data in private clouds because their members need access. They must also protect thousands of customers’ personal information while looped into a 24/7 access cycle. CUs also cannot place this data on public cloud servers as cybercriminals could then gain access to millions of private bank accounts.
A hybrid cloud model that combines security with access is emerging as the most attractive option for CUs. It strikes a balance between public servers’ completely open access and the restricted access of private servers, essentially allowing partnering clients to choose the areas in which their data is kept. This eliminates the public cloud model’s security concerns while allowing quick access and ease of use. Entities can keep less critical data on the “public” side and more sensitive information behind secure locks, making it significantly harder for fraudsters to snatch and grab.
Future cloud computer developments
Research suggests that transitioning to hybrid cloud solutions can move crucial data out of fraudsters’ hands, but data security is not the only benefit. These models can also provide CUs with more flexibility to scale their platforms, increase their IT departments’ productivity and decrease their overhead costs. This can enable credit unions to explore additional data analytics functionalities as well as more flexibly meet customers’ needs, allowing for further growth and customer satisfaction.
Hybrid models can also help IT professionals more seamlessly implement newer security measures as they allow them to make necessary upgrades without installing patches to each CU’s servers. This means such professionals can avoid public clouds’ vulnerabilities and private clouds’ restricted access while taking full advantage of their respective accessibility and security.
CUs and other financial industry players must be sure to balance cloud solutions’ speed and security, meaning proper cloud and data management are essential. Both of these requirements will likely remain top concerns for CUs, even as cloud technologies grow more sophisticated.