Cloud Computing In Banks
On July 10, the Federal Financial Institutions Examination Council (FFIEC) – which recommends standards and uniform principles to be enforced by the federal government's major financial councils and groups – released a statement on the risks of outsourced cloud computing services as it relates to financial institution management.
The statement can be interpreted less as formal guidance and more as an attempt to define cloud computing and bring to light the risks associated with this technology. Though many financial firms' risk management teams have been wary of outsourcing certain business processes to cloud vendors, the reality is that many now view the cloud as an affordable and effective way to collect and store vital business data, particularly when developing a risk management framework.
In fact, as the GDS Link blog reported near the end of August, a Gartner study showed less reluctance on the part of risk management teams to store sensitive data in SaaS platforms. In light of this reality, FFIEC recommends that banks and other financial institutions practice due diligence when working with a provider of outsourced cloud computing.
"Outsourcing to a cloud service provider can be advantageous to financial institutions because of potential benefits such as cost reduction, flexibility, scalability, improved load balancing and speed," read the FFIEC statement, which added that financial institutions should vet providers for their methods related to data classification, data segregation and disaster recovery.
While the statement may be helpful, critics say the FFIEC has not offered clear enough guidance, which may leave small banks in the lurch when it comes to defining cloud practices, determining risk factors and evaluating business partners. In an interview with American Banker on the issue, banking technology analyst Shirley Inscoe recommended that banks seek the consultation of an outsourcing expert to evaluate the risks related to banking and cloud computing.
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On July 10, the Federal Financial Institutions Examination Council (FFIEC) – which recommends standards and uniform principles to be enforced by the federal government's major financial councils and groups – released a statement on the risks of outsourced cloud computing services as it relates to financial institution management.
The statement can be interpreted less as formal guidance and more as an attempt to define cloud computing and bring to light the risks associated with this technology. Though many financial firms' risk management teams have been wary of outsourcing certain business processes to cloud vendors, the reality is that many now view the cloud as an affordable and effective way to collect and store vital business data, particularly when developing a risk management framework.
In fact, as the GDS Link blog reported near the end of August, a Gartner study showed less reluctance on the part of risk management teams to store sensitive data in SaaS platforms. In light of this reality, FFIEC recommends that banks and other financial institutions practice due diligence when working with a provider of outsourced cloud computing.
"Outsourcing to a cloud service provider can be advantageous to financial institutions because of potential benefits such as cost reduction, flexibility, scalability, improved load balancing and speed," read the FFIEC statement, which added that financial institutions should vet providers for their methods related to data classification, data segregation and disaster recovery.
While the statement may be helpful, critics say the FFIEC has not offered clear enough guidance, which may leave small banks in the lurch when it comes to defining cloud practices, determining risk factors and evaluating business partners. In an interview with American Banker on the issue, banking technology analyst Shirley Inscoe recommended that banks seek the consultation of an outsourcing expert to evaluate the risks related to banking and cloud computing.
[:es]On July 10, the Federal Financial Institutions Examination Council (FFIEC) – which recommends standards and uniform principles to be enforced by the federal government's major financial councils and groups – released a statement on the risks of outsourced cloud computing services as it relates to financial institution management.
The statement can be interpreted less as formal guidance and more as an attempt to define cloud computing and bring to light the risks associated with this technology. Though many financial firms' risk management teams have been wary of outsourcing certain business processes to cloud vendors, the reality is that many now view the cloud as an affordable and effective way to collect and store vital business data, particularly when developing a risk management framework.
In fact, as the GDS Link blog reported near the end of August, a Gartner study showed less reluctance on the part of risk management teams to store sensitive data in SaaS platforms. In light of this reality, FFIEC recommends that banks and other financial institutions practice due diligence when working with a provider of outsourced cloud computing.
"Outsourcing to a cloud service provider can be advantageous to financial institutions because of potential benefits such as cost reduction, flexibility, scalability, improved load balancing and speed," read the FFIEC statement, which added that financial institutions should vet providers for their methods related to data classification, data segregation and disaster recovery.
While the statement may be helpful, critics say the FFIEC has not offered clear enough guidance, which may leave small banks in the lurch when it comes to defining cloud practices, determining risk factors and evaluating business partners. In an interview with American Banker on the issue, banking technology analyst Shirley Inscoe recommended that banks seek the consultation of an outsourcing expert to evaluate the risks related to banking and cloud computing.
[:it]On July 10, the Federal Financial Institutions Examination Council (FFIEC) – which recommends standards and uniform principles to be enforced by the federal government's major financial councils and groups – released a statement on the risks of outsourced cloud computing services as it relates to financial institution management.
The statement can be interpreted less as formal guidance and more as an attempt to define cloud computing and bring to light the risks associated with this technology. Though many financial firms' risk management teams have been wary of outsourcing certain business processes to cloud vendors, the reality is that many now view the cloud as an affordable and effective way to collect and store vital business data, particularly when developing a risk management framework.
In fact, as the GDS Link blog reported near the end of August, a Gartner study showed less reluctance on the part of risk management teams to store sensitive data in SaaS platforms. In light of this reality, FFIEC recommends that banks and other financial institutions practice due diligence when working with a provider of outsourced cloud computing.
"Outsourcing to a cloud service provider can be advantageous to financial institutions because of potential benefits such as cost reduction, flexibility, scalability, improved load balancing and speed," read the FFIEC statement, which added that financial institutions should vet providers for their methods related to data classification, data segregation and disaster recovery.
While the statement may be helpful, critics say the FFIEC has not offered clear enough guidance, which may leave small banks in the lurch when it comes to defining cloud practices, determining risk factors and evaluating business partners. In an interview with American Banker on the issue, banking technology analyst Shirley Inscoe recommended that banks seek the consultation of an outsourcing expert to evaluate the risks related to banking and cloud computing.
[:tr]On July 10, the Federal Financial Institutions Examination Council (FFIEC) – which recommends standards and uniform principles to be enforced by the federal government's major financial councils and groups – released a statement on the risks of outsourced cloud computing services as it relates to financial institution management.
The statement can be interpreted less as formal guidance and more as an attempt to define cloud computing and bring to light the risks associated with this technology. Though many financial firms' risk management teams have been wary of outsourcing certain business processes to cloud vendors, the reality is that many now view the cloud as an affordable and effective way to collect and store vital business data, particularly when developing a risk management framework.
In fact, as the GDS Link blog reported near the end of August, a Gartner study showed less reluctance on the part of risk management teams to store sensitive data in SaaS platforms. In light of this reality, FFIEC recommends that banks and other financial institutions practice due diligence when working with a provider of outsourced cloud computing.
"Outsourcing to a cloud service provider can be advantageous to financial institutions because of potential benefits such as cost reduction, flexibility, scalability, improved load balancing and speed," read the FFIEC statement, which added that financial institutions should vet providers for their methods related to data classification, data segregation and disaster recovery.
While the statement may be helpful, critics say the FFIEC has not offered clear enough guidance, which may leave small banks in the lurch when it comes to defining cloud practices, determining risk factors and evaluating business partners. In an interview with American Banker on the issue, banking technology analyst Shirley Inscoe recommended that banks seek the consultation of an outsourcing expert to evaluate the risks related to banking and cloud computing.
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