The modern era is the era of cloud computing, and this technology is taking the world by storm. However, it was not before 2006 that technology leaders like Amazon and Google started moving to the cloud. Today, most businesses have either moved to the cloud or are in the process of doing so to achieve successful results.
As reported by Forbes, the banking or fintech industry has been slower in adopting cloud security. This can be attributed to the banking sector’s stringent regulatory concerns and understandable security reasons. But with the rise of fintech businesses, the industry is changing day by day. The New York Times reports that big giants like Wells Fargo, Capital One, Morgan Stanley, and more are transitioning to cloud-based services. Moreover, according to The Wall Street Journal, NASDAQ plans to move all of its markets to Amazon’s cloud infrastructure.
With these big names making a move, it is time for you to consider implementing cloud security services in your fintech business as well.
Here are the five reasons why:
5 reasons to implement cloud security in the fintech industry
This comes as no surprise that the fintech sector has been one of the most targeted industries for cybercrime. According to Statista, approximately 2527 cyber incidents were reported in the financial sector in 2021. So this is where cloud security comes in.
1. Enhanced security
As per McKinsey, “cloud can improve platform integrity through automated and embedded security processes and controls.” Undoubtedly, technological advancements in finance have made our lives better and easier. However, it has also created new opportunities for cybercriminals and posed threats to the user’s financial data. They can now target banks and other financial institutions with sophisticated attacks that are difficult to detect and prevent.
So, in order to mitigate the security risks, it’s essential to have a robust security system in place. And this is where cloud security comes in. Cloud-based security solutions offer enhanced protection against cyber attacks. They also offer resilient security architecture that can quickly adapt to changing threats.
2. Sophisticated data management
Proper security measures are essential in the fintech industry, where sensitive financial data is constantly being collected, transmitted, and stored. Cloud technology offers a solution to manage this deluge of financial information in a secure and efficient manner. By implementing cloud security protocols, organizations can protect sensitive data from unauthorized access and reduce the risk of data breaches.
Moreover, cloud storage allows authorized individuals quick and easy access to data, improving operational efficiency. In an industry where trust and information protection are paramount, investing in cloud security can be crucial for fintech companies to ensure their data management.
3. Improved risk management
As Mckinsey reports, “most banks find it difficult to give up their legacy on-premises applications, with only a few exceptions of early adopters like Capital One – which started a migration to the Amazon Web Services (AWS) cloud in 2012 and closed the last of its eight on-premises data centers in November 2020.”
So, it won’t be wrong to say that cloud computing can offer improved risk management for banks and other financial institutions. By this, we mean that cloud-based services can help organizations better manage and monitor their operational, compliance, and reputational risks. In the era of digitalization, where the speed of change is rapid, financial institutions must quickly identify and respond to risks. Cloud computing can help them do just that by providing real-time data and analytics. For example, banks can use cloud-based services to identify fraudulent activities and prevent them from happening in the first place.
4. Improved scalability
With workloads constantly increasing, it can be difficult for financial organizations to keep up with the demand. Cloud services offer a solution to this problem by providing on-demand resources that can be quickly provisioned as per the demands. This will help organizations save a lot of money by avoiding the process of buying and managing physical infrastructure.
Moreover, cloud services are highly scalable, so organizations can quickly increase or decrease their capacity as per their needs. This can be a significant advantage for banks or other financial institutions that experience seasonal fluctuations in demand. For example, a payment platform, Yedpay, decided to migrate to the cloud after facing a data center issue; with no need for people on-site and the ability to quickly scale up or down, they were able to reduce the costs by 40%.
5. Cost reduction
Every financial institution wants to reduce their costs, but very few can achieve it. So, cloud services can help organizations save on infrastructure and personnel costs. As by moving to the cloud, businesses won’t need to buy expensive hardware or hire extra staff to manage it. Cloud service providers take care of all that.
And not just this, cloud services often charge on a pay-as-you-go model, so financial institutions only need to pay for the resources they use. This can help save a lot of money in the long run. For example, a Melbourne-based retail bank, ME bank, reduced its IT cost for new services by 75% after migrating its testing and development environments to the cloud.
As technology advances, so does the need for improved and innovative solutions in the financial sector. Cloud computing helps in improved security, better risk management, reduced costs, increased scalability, and data management. So what are you waiting for? If you still have not moved your business to the cloud, now is the time.
PingSafe is one of the recommended Cloud Security Solutions for the Fintech Industry. It is only a CNAPP platform powered by an attacker’s intelligence. PingSafe’s offensive security engine helps businesses address the most critical and exploitable vulnerabilities at blazing-fast speed and scale. PingSafe helps secure cloud environments across various hyper scalers like AWS, GCP, and Azure, and various deployments like Kubernetes, VMs, and serverless.
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