Banks gradually learn more about cloud computing

December 17, 2014

Like any major business operation, banks have an interest in streamlining operations as new technologies offer ways to boost efficiencies and cut costs. However, one of the primary criticisms of cloud computing from all industries has been the perception that it is still unsafe. As one might suspect with an industry of such scale and importance, banks cannot put themselves at risk to hackers and data breaches.

Yet as these kinds of security systems continue to improve and strengthen the case for widespread cloud implementation, banks and their employees are also starting to become a part of this burgeoning form of technology. That said, the transition process still leaves room for error.

Cloud risks for bankers
American Banker reported that while bank executives continue to worry about security issues for cloud computing technologies, their employees regularly use a number of potentially risky apps.

The publication noted that the average bank used 844 cloud computing services throughout its network in the third quarter of 2014. Despite this high figure, Rajiv Gupta, CEO of cloud security software company Skyhigh, said that most financial services groups would estimate the number to be between 32 and 34.

David Levin, director of information security with Western Union, understands that these security issues can be quite difficult to monitor. To put it in light terms, he asked,¬†“When was the last time anyone read the Apple terms and conditions?”

“In today’s world, from an internet and cloud perspective, it’s difficult,” Levin told the publication. “It starts with a lot of awareness and training for the end user to know what not to do. Then there’s technology to help defend that. There’s no silver bullet. You’ll always have a user problem. People will do whatever they need to do to get what they need done.”

IT spending decreases as cloud use grows
Cornerstone Advisors in Scottsdale, Arizona, recently surveyed 80 mid-sized banks in the U.S. and found that IT spending as a percentage of assets decreased in 2014, according to American Banker. The publication attributed this decline to the increasingly inexpensive costs of hardware and cloud services.

Terry Roche, a partner with Cornerstone Advisors, said that mature businesses need to find ways to benefit from these emerging technologies.

“Banks have done a good job taking advantage of commoditized pricing, things like cloud services that have a cheaper cost,” Roche told the publication.

As banks find more ways to use the cloud in daily business, they’ll gain a better understanding of security measures and how employees are using the technology. In time, this could lead to a greater level of comfort and, in turn, comprehensive implementation.