Cloud computing can be effective for financial institutions
Cloud hosting services are sometimes considered adequate for small business systems and trivial enterprise applications, but this reputation is beginning to disappear. A recent study from the Federal Financial Institutions Examination Council found that the cloud can adequately support financial institution functionality, recognizing the availability for secure and regulatory compliant cloud options.
Whether companies are subscribing to Infrastructure-as-a-Service plans or application-based cloud models, some experts believed the technology would never be ready for mission-critical or highly sensitive functions. The FFIEC found that cloud computing is effective in such environments, as financial institutions face challenging IT requirements.
According to the news source, financial institutions basically need to enter any cloud plan like they would any other IT outsourcing solution. The difference is that they have to analyze the cloud vendor's solution options and security capabilities just a little more than they would in another outsourcing deal because the cloud presents distinct challenges.
Essentially, the statement makes it clear that regulatory bodies consider the cloud capable of being established in such a way that it can meet the unique requirements of financial institutions as long as companies do their due diligence and perform thorough risk management.
At its core, cloud computing presents a computing model that can be more secure than many enterprise systems when it is established properly. However, the architectural models that make up the cloud make it difficult to adequately track the physical location of data and identify exactly where any piece of information is at any time. This makes the solution problematic for many financial institutions. However, providers that align their cloud setups with the specific needs of the industry can overcome these challenges and enable more widespread cloud adoption.
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