In 2021, the European Cloud User Coalition (ECUC), made up of some of the continent’s largest banks, was formed to accelerate the adoption of off-premises technologies, primarily cloud computing, in financial services.
This is an acknowledgment of a trend that has been going on for several years and is already having a significant impact on the industry.
Financial institutions are increasingly turning to the cloud to harness vast amounts of information to guide the development of differentiated financial products in highly competitive markets. The cloud has also enabled banks by increasing the visibility of their risk management assessments. This allows banks to coordinate business decisions and combat fraud and money laundering.
However, intensive use of data in the cloud comes with technical, legal, and ethical challenges. Data security and privacy has become a major concern for all C-level executives, not just his CIO and data security professionals at companies.
The circumstances in which security decisions are made and implemented are constantly changing. Therefore, businesses need to understand how data security is evolving and not expose themselves and others – data subjects – to increased risk when building analytics and data science programs. I have.
Basically, there are three main trends that affect data security. Macroeconomic trends such as pandemic response and ongoing economic recession, technology trends driving data storage in many places such as cloud, on-premises, and edge devices, and the need for organizations to secure data more often. Regulatory pressure imposing tough measures.
It’s imperative that CIOs stay on top of all three trends and communicate them to their C-suite colleagues.
The pandemic has had a major impact on the process of digital transformation. Employees often had little choice but to work remotely, and this put all kinds of pressure on data security. Employees were at the center of some of the world’s most notorious data breaches, including his Equifax data breach that exposed the records of nearly 146 million Americans.
Customer habits have also changed. Since their purchases and physical banking are largely done online, financial services firms have had to act quickly to accommodate this. During this period, however, privacy concerns weren’t always as high on the agenda as they probably should be.
And now we are in the middle of an ongoing recession. Banks and financial institutions could be affected as they try to cope with rising interest rates, inflation and a nervous customer base.
Ever-changing technology is also putting pressure on banks to maintain a high level of data security.
Legacy issues are a serious problem for some established financial services companies, especially related to online banking. Systems in place may not be designed to address issues such as data deletion and fine-grained control. Moving from on-premises storage to cloud computing is another matter. This is due to the need to implement new data management strategies that can handle the complexities of storing data in multiple locations and controlling data flows that typically involve different stakeholders.
In parallel, there is increasing pressure on many organizations to adopt innovations such as distributed ledger technology (DLT) and artificial intelligence to improve data security. Both can help increase the level of data security, but they are not without their problems. For example, DLT is transparent, traceable, and immutable. Data stored in the ledger can be viewed by all parties, making it useful for financial institutions in a variety of use cases. However, it also poses other storage challenges, such as compliance with storage limits and deletion requirements.
Financial services organizations must also prepare for the surge in data volumes that is likely to occur over the next few years. IoT, voice banking, and biometrics all create data that allows banks to get to know their customers better, but in addition to monitoring and monitoring individuals, processing large amounts of often unstructured data. I have concerns about that too.
Financial institutions are already facing increasing regulatory reporting burdens and need to comply with sound regulatory regimes, standards and guidance that require detailed data. Additionally, the global nature of cloud infrastructure increases the need to meet local data sovereignty requirements and international transfer restrictions found in frameworks such as GDPR. There is also a hodgepodge of new privacy laws, including state laws that are emerging in the United States. After adopting CCPA, financial institutions will need to consider compliance and regulatory requirements not only in the jurisdiction where the data resides, but also in the jurisdictions where the data is transferred or accessed. Additional users, data sources, and data consumption tools increase the complexity of data access, exposing data to even greater risk.
From obtaining customer consent, establishing legitimate interests and using data in an appropriate manner, to ensure that control over data is vital to our workflows and processes. Banks are in the spotlight.
The change in data management can be overwhelming for technology leaders already pressed for time. However, financial services organizations should take the initiative to build access control and detection and auditing capabilities into their data strategy.
Data must be properly protected. Provide the right access at the right time and control it in a way that complies with ever-growing regulations.
Fortunately, there are ways to automate data security to eliminate both the lot of manual work and the maintenance burden of managing access and privacy controls for different roles across your organization. These new types of approaches help unify and enforce policies across cloud platforms, ensure the right users have access to the right data, monitor data usage in real time, safeguards so that compliance can be demonstrated. decree.
Once these horizontal, by-design approaches to compliance are established, the time to data is reduced.
Technology-backed consistency is key
Organizations that adopt a consistent approach to data management and access control can improve security and compliance while establishing a foundation for extracting greater value from their data.
When it comes to regulation, there is a common misconception that highly regulated companies are at a disadvantage. In practice, however, organizations that must comply with a set of regulatory requirements are often ready to use their data to achieve better business outcomes. They emphasize the importance of data security, governance and compliance-first strategies. This improves data analysis, decision-making and operational support, contributing to overall success.
There is no denying that data security will become a key issue for financial services firms in the years to come due to a number of factors. But by adopting a consistent approach and leveraging technology, we will be better prepared to meet the challenge.
Sophie Stalla-Bourdlon is Senior Privacy Counsel and Legal Engineer at Immuta.