Why a 'Clandestine cloud culture' is threatening FS data

The past few years have seen a wide shift across all kinds of organisations towards harnessing digital technologies. Gartner calls this ‘The Digital Industrial Economy’, where every business wants to become a digital leader and every company a technology company. Whilst this is happening across many industries, the Financial Services (FS) sector is one which is truly in the midst of transformative times. Developing new and increasingly sophisticated ways of using data is helping many in the industry to achieve growth by improving their services and diversifying their offering. This has been so successful that the bourgeoning ‘fintech’ market’s revenues are now estimated to be worth over $4.7 trillion.

However, with increasing regulation and compliance from the Financial Conduct Authority, FS organisations cannot afford to take risks with their data. The consequences of a data breach can extend to losses of hundreds of millions of pounds from the costs of managing damage, to contractual compensation and longer term impact to the brand the business may have spent years building.

With these risks in mind, a recent study investigated the motivations and rationale behind different Line of Businesses (LOBs) within FS organisations procuring public cloud services.

The study revealed that 92% of LOBs in these companies use some form of public cloud. The factors driving adoption ranged from affordability (41% cited it was a cheaper solution), to ease of use (34%) and wanting to meet client needs (30%). Using public cloud services can help organisations with everything from streamlining administrative management, through to information visualisation and trend analysis. Thanks to their intuitive design, widespread availability and low cost barriers, many employees already know how to use these tools and aren’t afraid to deploy them where they are required.

While this is an exciting way to empower workers and excel the pace of innovation across all departments, from a security and data management perspective the unofficial use of the public cloud within an enterprise can poses several risks. The chief issue is that data is not always secure in the public cloud as it is hosted in third party data centres, which the organisation itself has no control over.

Thhe research revealed that despite being one of the most highly regulated industries, employees in the FS sector who want to use the public cloud are sidestepping the IT department and deploying cloud services without consulting them. In fact, 44% of those surveyed admit to bypassing the IT department when purchasing cloud services.

By circumventing the IT department, these FS decision makers are potentially putting their organisations at risk of financial losses reaching hundreds of millions of pounds in the event of a security breach from unauthorised access to data.

However, by impeding the use of public cloud, organisations could slow the pace of innovation and prevent departments from all areas within the business from working as efficiently as possible, as well as curbing innovation within the organisation. So what should IT departments do to ensure their organisations can benefit from the scalability and efficiency of the public cloud, without risking security issues?

The answer lies in a hybrid cloud approach, which can provide the best of both worlds by providing the flexibility, affordability, agility and scale of the public cloud, without compromising safety and compliance regulations.

This approach can ensure that business-critical applications remain in-house, while instantly provisioning the infrastructure from public cloud to cope with new projects and setting up virtual servers to handle a new system. It can be scaled back just as easily when needed, a distinct advantage given the difficultly – or sometimes impossibility – of taking workloads back out of the public cloud.

A true hybrid cloud could also allow organisations to use a common platform for extending their existing data centre to the cloud while leveraging the tools, existing security policies and processes that they already use on-premise.

With an enterprise hybrid cloud strategy in place, line of businesses can focus on their business interests, while gaining immediate and easy to access, secure resources. As a result, organisations can embrace the public cloud with confidence, in a secure way and focus on surviving and thriving in the fast-paced era of digital enterprise.