Implementing a cloud-based recordkeeping system can provide easy access for your financial institution’s staff members and can help you to achieve improved compliance with ever-changing federal regulations. Cloud computing solutions are not without their risks, however, and must be properly implemented and maintained to ensure the confidentiality of client information and the security and long-term retention of records as required by law. Ensuring that cloud-based storage arrangements offer adequate protection for sensitive financial data and that they offer optimal access for your compliance team and other authorized staff members can help your company stay on the right side of federal regulations.
Here are four key issues to consider when implementing cloud computing strategies into your company’s storage and access plan.
1. Consistent Access
Federal law mandates a 72-hour turnaround time for requested trade reconstruction information. If your cloud services provider cannot deliver consistent and reliable access to all information stored on your company’s behalf, you may be unable to comply with requests from federal agencies in this relatively limited amount of time. Cloud providers with frequent downtimes or extended outages can also damage your reputation with clients and may affect your overall profitability in the financial marketplace.
2. Ownership of Cloud Data
It is essential to read the fine print when contracting with a cloud services company, especially one located outside the U.S. and subject to different laws and regulations. Some important issues to discuss prior to signing on the dotted line include the following:
Does your company retain exclusive ownership of the data stored in the cloud?
Who has access to this data at the cloud server facility?
If the cloud services company is sold to another company or goes out of business, what provisions have been made to provide access to data stored on its servers and to return that data to your company?
Ensuring that your company will have reliable access to and ownership of your data even under difficult circumstances is absolutely vital to maintaining compliance in the current regulatory environment.
3. Security Measures
A report released by the Cloud Security Alliance in February 2014 listed the Notorious Nine top threats for cloud computing security:
Account and traffic hijacking and redirection
Denial of service attacks
Application programming interfaces that lack proper security features
Unauthorized access by cloud services staff
Accidental or intentional access by other clients of the cloud services provider
Misuse of cloud resources
Lack of care in selecting an appropriate cloud services provider
Implementing secure login strategies and maintaining encryption keys on site instead of with the cloud services provider can help to alleviate the most common and relevant issues on this list. However, the possibility of data loss and data breaches should be addressed in a proactive fashion to ensure that sensitive and confidential information is adequately protected and that seven years worth of records are available upon request by federal agencies.
4. Migration Issues
Moving digital information from one format to another can be a challenging undertaking. Ensuring that cloud-based storage can be accessed easily from your workplace operating systems and can be transferred to other platforms quickly can be critical to your compliance efforts. XML formats can often provide the greatest degree of compatibility and interoperability for your financial records.
Are you confident in your company’s cloud-based records management strategy? A knowledgeable advisory and consulting firm can deliver solid advice and guidance for cloud-based storage and help your company achieve full compliance with regulatory requirements while streamlining access for your staff members. By working together, you are more likely to increase your productivity and improve your customer service. Your financial services firm can maintain a positive corporate reputation in this competitive marketplace.