6 reasons why finance is safer in the cloud

June 30, 2020

First published on Banken.nl, 29 June 2020, by Bart van Praag, general manager of EMEA at Workiva. 

Working from home involves additional risks, the Authority for the Financial Markets (AFM) warns based on recent research among fifteen financial companies in the Netherlands. The dangers lie in particular in the increased external use of corporate networks, which, especially now that everyone is working from home, are an attractive target for cyber criminals. The AFM identifies six risks for finance organizations, which can largely be traced back to the infrastructure. With the right infrastructure, these dangers can be largely prevented. The cloud is now an integral part of such an infrastructure. These are the words of Bart van Praag, General Manager at Workiva.

1. The risk of data leaks

The AFM points out that working from home increases the risk of data leaks. A data breach is in a small corner: web traffic outside a VPN, a PDF document sent via unsafe channels as an attachment, a printed document with confidential information.

The risks can be partly mitigated by enforcing strict policies on, for example, printing at home. But a cloud solution offers more advanced (and verifiable) methods to prevent data breaches. 

All joint work is done in a secure environment, so that documents do not have to be shared via unsecured channels. In that cloud environment, organizations can also grant strict permissions to individual users so that unauthorized users cannot access sensitive documents. In addition, by arranging printer authorization - or completely blocking critical sections in documents for printing - the risk of data leaks is suddenly much less

2. The risk of unsafe IT systems due to delayed patching

When vulnerabilities are discovered in on-premises software, it's up to the in-house IT team to download, test and install patches before malicious parties find and exploit the hole in your environment. If your IT team does not do this on time, you leave the back door wide open, as it were. Cloud solutions do not have these problems: every organization uses the most recent version of the service at all times, so you can be sure that security problems will be solved as soon as they are discovered.

3. Key person risk

Smaller companies in particular are susceptible to a so-called key person risk. This means that business operations are significantly disrupted when certain people disappear, for example in case of illness. While larger businesses have enough capacity to keep business running, smaller businesses can suddenly run out of IT support if just one person goes down.

This is a major problem when the enterprise is running on an on-premises network. However, when an organization uses cloud solutions, the dependence on its own staff is reduced. IT support is provided by the cloud provider, which is generally large enough not to be susceptible to key person risk. This ensures that the business-critical processes are maintained even when the IT staff is lost.

4. The risk that the continuity and quality of external service providers will change

It can be scary to outsource the management of finance software to an external service provider. What if the service is lost? What if they themselves suffer so much from a crisis that the service slows down?

The AFM's investigation does not indicate that the services of external suppliers have come under pressure. In some cases, however, the response to non-urgent requests was slightly slower. There are also few reasons for organizations to worry about uptime. 

The availability of the services is critical to the business operations of suppliers. They will therefore make every effort to ensure that their services are fully available. No service is perfect now. It can indeed happen that malfunctions occur. But that applies to both on-premises systems and cloud solutions. It is therefore questionable whether a disruption of a few hours outweighs the in-house management of the entire digital infrastructure.

5. An increased risk of phishing

Cybercriminals were there from the start of the corona crisis  as the chickens in. Phishing emails were sent a lot more often than usual. Phishing emails attempt to retrieve login details from unwary users. A significant investment in the IT infrastructure is required to be secured here. 

It is true that cloud solutions are an attractive target because of their proximity to the 'open' internet. Suppliers know very well. That is why security is serious business for them! The best cloud solutions not only provide advanced login security such as two-factor authentication, but also provide high-quality data encryption when information is sent over the internet and when it is saved again. 

They are also very strict in adhering to safety standards through compliance certifications such as SOC 2, specialized security teams and regular security checks by independent parties. These are standards of a level that you rarely see in on-premisess software.

6. Greater risk of DDoS attacks

The Dreaded Distributed Denial of Service (DDoS) Attack: Cybercriminals are robbing the network's capacity to disrupt operations. This means that the entire network can be paralyzed in one fell swoop, so that no one can do their work anymore. DDoS attacks are incredibly frustrating and cloud suppliers are also a regular target. 

However, the increased risk has led to the availability of strong countermeasures. Good cloud vendors have better standards than many on-premises systems: a very robust network architecture with multiple redundant servers, teams that constantly monitor developments in cyber security and comprehensive response strategies when an attack occurs.

The cloud unburdens

Safety is paramount in financial organization, whether people work from home or in the office. By listing the six most important risks for finance organizations, the AFM shows that security always has priority, even in uncertain times. Choosing a cloud provider with a rigorous focus on security drastically reduces the risks associated with working from home. Working in the cloud means working safely, regardless of location, now and in the future.

 

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