5 Best practices towards building a compliant and secure hybrid-cloud infrastructure in the Financial Services Industry
The financial services industry is a constantly evolving space that continually innovates to keep pace with changing customer demands, market volatilities, and technology disruptions— One such evolution is the adoption of cloud computing. The Financial Services Industry (FSI) has been on the cloud journey for 10+ years; however, the adoption soared during the pandemic and has been progressing at an incredible rate.
A popular strategy has been deploying a hybrid cloud at the enterprise level given the financial services dependency on legacy systems, on-premises data centers, and concerns around compliance & security. 89% of banks reported that they are currently operating with or planning to operate with a hybrid cloud solution, according to the IDC’s 2020 CloudPath survey.
At the onset, it seems that hybrid cloud is here to stay, with several leading finance and banking organizations in the fortune 100s increasingly adopting this strategy. To name a few, Bank of America launched a hybrid cloud with IBM, while Banco Santander partnered with Microsoft Azure for driving their hybrid cloud strategy, and many more.
Let’s look at why hybrid cloud adoption is on the rise in the financial services industry
Cloud computing became popular within the financial services industry due to the need to eliminate high fixed costs due to sizable on-premises data centers and quicker modernization of their IT ecosystems to gain a competitive edge.
Cloud provides the ability to optimize the costs and scale up and down based on market demands. Organizations could now pay only for the data storage that they used. Additionally, the cloud provided scalability and flexibility to launch new and innovative customer-centric products that help banks and financial services providers remain competitive with FinTechs and neo digital banks. This opportunity also included the evolution of open source, open APIs, emerging technologies, and implementation of DevOps practices. FSIs have been rapidly adopting cloud computing to drive better results, improve operations resiliency, enhance customer experience, and improve scalability.
Although cloud computing is a huge catalyst to the overall growth of an organization, the journey to it is not simple. We’re all aware that FSIs have significant technical debt and a large stack of legacy systems, most of which are central to their operations, such as payments and core banking. In such a scenario, enterprise cloud migration can take a long time – sometimes years. Also, one cannot ignore the heavy investments required to fully or partially replace legacy systems or upgrade them to meet the public cloud deployment needs. Another criterion that discourages enterprise-wide cloud migration is the pressure of regulatory and compliance adherence.
The financial services industry is a highly regulated and risk-averse financial service. Any sign of non-compliance can cause them a penalty of millions of dollars and, of course, reputational risk. Given that enterprise data migration to the cloud can be a costly and risky affair, should FSIs deploy their core banking functions and applications to the public cloud? The answer could potentially be deploying a hybrid or multi-cloud strategy.
A hybrid cloud environment offers the combination of on-premises and public cloud resources that helps companies embrace the best of cloud offerings for applications and processes that need scalability, cost reduction, and agility and ensure compliance, data privacy, and security for their core applications.
Did You Know? – According to one of the Gartner reports, the cloud will be the centerpiece of new digital experiences. In 2022, global cloud revenue is estimated to total $474 billion, up from $408 billion.
Six best practices towards building a compliant and secure hybrid cloud infrastructure
Organizations are increasingly adopting the cloud, be it private, public, or hybrid. The first and foremost step in that journey is migrating on-premises data into the cloud. Due to uncontrolled data sprawl and the increase of unstructured data, the cloud migration journey for most organizations becomes complex and stressful. Data soon becomes a liability with security, risk, and compliance concerns. What’s the best way for organizations to migrate enterprise data to the cloud while reducing risks and costs in the face of so much data?
- Discover and Index: The first step is to discover and tag unstructured data containing sensitive or private information. Analyze the file content of your unstructured data for key personal identifiable information (PII), personal health information (PHI), or business-sensitive data. Then define risk profiles and file classification using intelligent tagging. By combining the identification of risk with data classification, organizations can understand the risk that exists and provide easy means of quantifying it. Artificial intelligence and machine learning technologies can be used to transition data from simply existing into aligned and refined data for risk reduction and business value.
- Ensure remediation of potentially sensitive data: Remediation is more than simply scanning and analyzing your environment for data that could potentially expose your employees and customers to risk. It allows you to resolve those issues. Identify the system for data that could expose the customers and the business to risk. Then ensure the use of the right remediation tools to mitigate the risk of sensitive data access and misuse to protect the business from any adverse effects. Organizations can mitigate the risk of sensitive data access and misuse through a robust, multi-approver remediation workflow that provides complete visibility of the remediation cycle’s request, approval, and execution phases.
- Quarantine the sensitive data: When files have personal or business-sensitive information and are accessible by a multitude of users, this creates exposure and exponentially increases the risk for rogue usage. Quarantine provides the ability to move files to a specified location and isolate them without anyone being allowed access. The air gap provided by Quarantine, with no means to access those files, helps you to prevent ransomware attacks on critical files while providing immediate protection. The key is to move sensitive data to a more secure location, such as sharing an object storage bucket file storage. A provision for moving the sensitive files from one file-share to another file-share and a file-share to an object-store location for easy accessibility can make the process smoother and more flexible.
- Leverage intelligent re-permissioning: Usually, file permissions are assigned at the time of its creation, based on the location and the storage specifications. With passing years new people join the organization, and there is a risk of granting file access to the unauthorized person in the process. Using intelligent file re-permissioning, enterprises can provide access-based control that can ensure consistent means to manage file permission and can help with risk mitigation.
- Maintain immutable audit trail: Classify and track files to create an immutable audit report that can be utilized for regulatory and internal data governance. Blockchain technology can help! A combination of off-chain and Blockchain technologies can be used in a way that the references to any personally identifiable data may be erased when required. Whenever an audited file is modified, the change can be added to the blockchain, and stakeholders can then view a report of all audited changes for the dataset as a whole or for a specific file, as needed. This step can give visibility into any changes made to PII data present in the scanned files with the details of the users’ modifications, updates, and deletion. Immutable audit reporting is the foundation for enterprises to develop into secure file sharing across business units or even outside the enterprise. It empowers the enterprise to proactively mitigate risk, provide scalable security remediation, and generate immutable reports for validation.
- Intelligent identification and actionable reporting: This step includes identifying and classifying data sets containing files with content fields associated with regulatory requirements. Start with the premise of supporting the strictest definition of privacy and thus identify a data set that has the highest probability of adherence. Enterprises can utilize the ready-made templates or create their own compliance templates based on their specific requirements. This identification is the first critical step in the process to remediate and meet regulatory requirements. Another critical requirement in most regulatory requirements is to report a consumer’s data back to them, i.e., “tell me what data you have about me”. This step across the unstructured data sprawl in enterprise environments is not an easy task, and most enterprises utilize point solutions to scan the environment for this single use case and provide static reports without any actionability. This causes additional technology overhead and costs millions of dollars without fully meeting the requirements of the regulatory bodies. Actionable reporting is the key here. This allows data custodians to make decisions about what data to store, how to store it, and what level of access and use is appropriate with the individual’s consent. This actionable functionality helps to meet the challenge posed by massive volumes of personal digital footprints created as a result of the digital revolution and the Internet of Things.
The most important step while building a hybrid cloud strategy is to select the right cloud service provider
Many top cloud service providers such as Azure, AWS, Google Cloud, and more offer cloud solutions in private, public, hybrid, or multi-cloud setups. FSIs need to map their plan and requirements with the services offered by these cloud providers. Due to stringent regulatory guidelines, FSIs demand data and applications stored in a highly regulated environment; hence, choosing the right cloud vendor is critical while shifting the workload to the cloud. Some of the key considerations while choosing the right cloud service provider are:
- Ensure the provider complies with recognized certifications and standards. Look for providers that follow structured processes and offer effective data management.
- Check if the provider follows best practices to safeguard data security and governance by identifying sensitive data and encrypting it with access-based control.
- Ensure your existing technology ecosystem aligns well with the provider and their-party technology ecosystem for seamless integration.
- Look for reliability and performance of the provider by checking into their previous SLAs and clarity in their agreement and communication policies.
- Cloud migration is not a one-time activity; hence ensures end-to-end migration support and avoids vendor lock-in risk.
One such cloud service provider is Microsoft Azure. As of 2021, the Azure cloud platform encompasses more than 200 cloud services and products. They are suitable for companies of all sizes and industries, including healthcare, financial services, government, and retail. The Azure platform is a popular choice for businesses today. Almost 70 percent of organizations worldwide use Microsoft Azure for their cloud services. To meet the diverse needs of its global customer base and accelerate an organization’s journey, Microsoft continually evolves the Azure portfolio. It introduces new programs to make cloud migration effortless and cost-effective.
Click here to check out how Data Dynamics utilized the Azure File Migration Program to help one of the world’s seven multinational energy “supermajors” Fortune 50 companies accelerate its net zero emission goals while driving digital transformation.
The latest is list is the Azure File Migration Program – zero license cost migrations into Azure with Data Dynamics’ StorageX, sponsored by Microsoft. Through this program, Microsoft and Data Dynamics aim to help organizations address some of their most critical challenges in the cloud migration lifecycle, such as cost, speed, talent, and risk. Customers can register their migration project information with Data Dynamics and start moving data today. Click here to know more – www.datadynamicsinc.com/microsoft
- Migration into Azure at no software cost to end customers.
- Automated, policy-based data migration from heterogeneous storage resources into Microsoft Azure cloud.
- Comprehensive Azure file storage endpoint support.
- Automated access control and file security management.
- 3X faster migrations, 10X more productivity, and lower risk.
Microsoft Azure and Data Dynamics’ StorageX enable easy, safe, and secure migration of file and object data to Azure Storage. A cloud-native environment can be established for legacy applications by migrating them to containers. Enterprises will receive free software licensing, support from a migration solution provider, and an onboarding session as part of this partnership.
Start off with the migration process
Cloud migration can be a daunting process if not planned and strategized in a well-mannered approach to ensure cost-effective, timely, and secure migration. While preparing to migrate workload in a hybrid cloud model ensuring competitive data security, enterprises must start with the primary classification of what data and workloads need to go on the cloud and stay on-premises.
Today, most of the top cloud providers also offer their migration services, and some offer it for free while others charge for it or recommend using a third-party solution. While starting off with the migration process, the goal is not to fail and complete the process in the desired timeline without any overheads.
To make the migration process smoother, FSIs can leverage the power of the latest technologies and automation and ensure secure cloud migration. Data Dynamics’ mobility suite, as a part of its unified unstructured data management platform, provides policy-driven, automated data migrations to meet the needs and scale of global enterprises. This platform helps with ML and AI-based data analytics for identifying potential risks and mitigating those. It also provides the ability to quarantine at-risk datasets and intelligently re-permission files while creating an immutable audit log powered by blockchain technology.
You can also join our upcoming webinar to learn about StorageX and the Azure File Migration Program on 24th February 2022 at 11:00 AM EST.
Topic: ‘Migrate your data to Azure like a boss with StorageX at Zero Cost.’