Welcome!

AJAX & REA Authors: Andreas Grabner, Tim Hinds, Alfredo Diaz, Kevin Benedict, RealWire News Distribution

Related Topics: Cloud Expo, Java, SOA & WOA, Virtualization, AJAX & REA, Web 2.0, Security, GovIT

Cloud Expo: Blog Post

FFIEC's Recognition of Cloud Security Advantages

How credit unions, smaller banks can now use outsourcing for compliance using security-as-a-service

Last month the Federal Financial Institutions Examination Council (FFIEC) shared an opinion on the viability and security of cloud computing. In the four-page statement, the interagency body empowered to prescribe uniform principles, standards, stated that cloud computing is “another form of outsourcing with the same basic risk characteristics and risk management requirements as traditional forms of outsourcing.”

What they are offering is a back-handed endorsement of cloud computing with the caveat that if you perform your due diligence and the solution passes the security smell test, there is no reason why a financial institution cannot enjoy the full scope of cloud based benefits.

Like most other industries on the planet, banks, credit unions, investment brokerages, hedge funds, title and mortgage companies, credit card enterprises outsource certain parts of their business for a variety of reasons. In some cases, it is a skill that is outside their core competencies like the physical transference of currency (armored cars). For others it incorporates economic and efficiency factors like reducing and controlling costs, expanding operational capacity, and employing best-of-breed philosophies. Regardless of the reasoning, outsourcing is an integral part of international business standards.

“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.” FFIEC Information Technology Subcommittee July 10, 2012

This is especially good news for credit unions and other smaller finance-centric enterprise organizations on the hook for compliance, heightened data and asset protection and access control   just like their multi-national brethren. In that the FFIEC has labeled cloud computing as an acceptable practice, I want to focus on three specific callouts that directly affect how and why security managed from the cloud (aka cloud-based security) fits with the strategic technology goals of any financial institution.

  • Legal and Regulatory Considerations All financial institutions operate under the heavy scrutiny of federal, state, local and industrial standards. It demands a certain degree of transparency (as well as privacy), a certain reliance on reporting and auditing, and heavy emphasis on compliance with various requirements. Although a serious and very complex issue, the ability to depend on several factors managed from the cloud, eases some of the burden. Regardless of where sensitive financial, personal and transactional data and is stored security-as-a-service typically provides the best-of-breed oversight institutions demand. Strictly from a security management perspective, understanding who and how and when any endpoint is attempting to access or ping a network asset at any time day or night is not only good practice, but a strict edict of laws like PCI and Sarbanes Oxley. But taken one step further, the ability to look beyond the obvious brute force attacks, the ability to instantly analyze traffic from a variety of silos and the ability inform, escalate and report any anomalies bases on strict interpretation of the law, creates. The cloud fits this stratagem simply by providing the additional expertise, faster and more accurate auditing and more “bang for the buck.

”I recall what a Network Apps Manager from Texas Capital Bank stated in a recent conference: "We get audited. We get audited a lot! In the span of a typical year we are audited by 6 different external and regulatory compliance groups." I get dizzy just thinking of the constant drain on resources it takes to keep up with it all. Not to put a fine point on it, but just consider the manpower, reporting and computing  relief an organization can experience simply by outsourcing Identity Management to provision and de-provision users , customers and vendors...not to mention the additional control from SaaS Single Sign On.

  • Holistic InfoSec All Financial institutions are typically at the center of many hacking attacks. The rule of thumb with cloud-based (or really any security strategy), is don’t worry about the attacks you can see coming. Most of the truly devastating breaches come from more insidious sources that are quiet and subtle. It is these types of assaults that look for cracks in a multitude of small, seemingly insignificant corners. This is why any strategy must contain a holistic approach. One that looks at and ties together the various and varied silos of information. This situational context approach identifies issues that might not raise red flags in one silo, but when correlated with other data points might require reporting, escalation and instant remediation.

And it’s no secret that global hackers have set their sites on American financial institutions but if you are running a credit union in Watertown, MN, do you need to fear nation-state cyber-terrorism? Probably not as much as Citibank, but shoring up your network perimeter is a must. Solutions like SIEM and Log Management have an excellent track record managed from the cloud. Other considerations such as careless third party users and employees, password mismanagement, poor vetting of third-party security protocols, access controls, must be addressed to achieve a true holistic approach strategy.  But for that credit union in Watertown or the title company in Carpenteria, CA there is limited budget to apply such an enterprise strategy. And that’s where cloud security comes in as a huge benefit. Security-as-a-service is typically a cash flow positive endeavor. This means there is no capital expenditures (it’s all OpEx) and there is no ROI lag time in terms of buying an expensive server or waiting 6 months to develop and deploy and appropriate program. Zero day deployment and pay-as-you-go scalability provide immediate return and immediate coverage.

  • Data segregation and recoverability: The nature of this issue is the overall security of data regardless of where and how it is stored. There are many whose lack of trust in the cloud prevents them from seeing that just because data is sitting on a server outside their four walls, means it is any less secure. By using the advice of the FFIEC, applying risk assessments against any outsourced solution, . It’s the same for any investment. If you do poor research on a electronic lock company, there are catastrophic risks involved. Many cloud providers invest a great deal in their security features. And of course, a company the sells security-as-a-service, must be as or more bulletproof than any on premises alternative in its ability to maintain data security, IT integrity and guaranteed continued service.

Now this isn’t aimed so much at Bank of America or Goldman Sachs, but rather “Main Street” institutions who don’t have a spare $100K waiting to spend on on-premise servers, $1 million to develop and deploy a holistic security strategy and another $150K for dedicated analysts to monitor activity around the clock. Cloud-based security provides more functionality, greater scope, and greater manageability than a typical local institution can afford to do in house. Through multi-tenancy, economies of scope and leveraged enterprise best-of-breed expertise and capabilities, every financial institution can benefit from top-class security…as long as they do their homework!

As with any business decision, whether to migrate certain aspects of enterprise operation to the cloud, depends on several factors. Does it promote your strategic and tactical plans/goals? Have you done your homework and made sure both the vendor and the solution are a good (and trustworthy) fit? Does it provide ROI in a reasonable/expected time frame? Does the reward outpace the risk? Is the risk manageable? I could go on. But the argument is no longer be should I utilize the cloud. The better question is in what situations and how do cloud based solutions create benefit and advantages for my company?

If you wish to learn more about the application of holistic security, read the white paper: Applying Security Holistically from the Cloud: A Paradigm Shift Applying Situational Awareness in SIEM Deployments.

Kevin Nikkhoo

CloudAccess.com

More Stories By Kevin Nikkhoo

With more than 32 years of experience in information technology, and an extensive and successful entrepreneurial background, Kevin Nikkhoo is the CEO of the dynamic security-as-a-service startup Cloud Access. CloudAccess is at the forefront of the latest evolution of IT asset protection--the cloud.

Kevin holds a Bachelor of Science in Computer Engineering from McGill University, Master of Computer Engineering at California State University, Los Angeles, and an MBA from the University of Southern California with emphasis in entrepreneurial studies.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Cloud Expo Breaking News
Next-Gen Cloud. Whatever you call it, there’s a higher calling for cloud computing that requires providers to change their spots and move from a commodity mindset to a premium one. Businesses can no longer maintain the status quo that today’s service providers offer. Yes, the continuity, speed, mobility, data access and connectivity are staples of the cloud and always will be. But cloud providers that plan to not only exist tomorrow – but to lead – know that security must be the top priority for the cloud and are delivering it now. In his session at 14th Cloud Expo, Kurt Hagerman, Chief Information Security Officer at FireHost, will detail why and how you can have both infrastructure performance and enterprise-grade security – and what tomorrow's cloud provider will look like.
The social media expansion has shown just how people are eager to share their experiences with the rest of the world. Cloud technology is the perfect platform to satisfy this need given its great flexibility and readiness. At Cynny, we aim to revolutionize how people share and organize their digital life through a brand new cloud service, starting from infrastructure to the users’ interface. A revolution that began from inventing and designing our very own infrastructure: we have created the first server network powered solely by ARM CPU. The microservers have “organism-like” features, differentiating them from any of the current technologies. Benefits include low consumption of energy, making Cynny the ecologically friendly alternative for storage as well as cheaper infrastructure, lower running costs, etc.
Cloud backup and recovery services are critical to safeguarding an organization’s data and ensuring business continuity when technical failures and outages occur. With so many choices, how do you find the right provider for your specific needs? In his session at 14th Cloud Expo, Daniel Jacobson, Technology Manager at BUMI, will outline the key factors including backup configurations, proactive monitoring, data restoration, disaster recovery drills, security, compliance and data center resources. Aside from the technical considerations, the secret sauce in identifying the best vendor is the level of focus, expertise and specialization of their engineering team and support group, and how they monitor your day-to-day backups, provide recommendations, and guide you through restores when necessary.
Web conferencing in a public cloud has the same risks as any other cloud service. If you have ever had concerns over the types of data being shared in your employees’ web conferences, such as IP, financials or customer data, then it’s time to look at web conferencing in a private cloud. In her session at 14th Cloud Expo, Courtney Behrens, Senior Marketing Manager at Brother International, will discuss how issues that had previously been out of your control, like performance, advanced administration and compliance, can now be put back behind your firewall.
Cloud scalability and performance should be at the heart of every successful Internet venture. The infrastructure needs to be resilient, flexible, and fast – it’s best not to get caught thinking about architecture until the middle of an emergency, when it's too late. In his interactive, no-holds-barred session at 14th Cloud Expo, Phil Jackson, Development Community Advocate for SoftLayer, will dive into how to design and build-out the right cloud infrastructure.
The revolution that happened in the server universe over the past 15 years has resulted in an eco-system that is more open, more democratically innovative and produced better results in technically challenging dimensions like scale. The underpinnings of the revolution were common hardware, standards based APIs (ex. POSIX) and a strict adherence to layering and isolation between applications, daemons and kernel drivers/modules which allowed multiple types of development happen in parallel without hindering others. Put simply, today's server model is built on a consistent x86 platform with few surprises in its core components. A kernel abstracts away the platform, so that applications and daemons are decoupled from the hardware. In contrast, networking equipment is still stuck in the mainframe era. Today, networking equipment is a single appliance, including hardware, OS, applications and user interface come as a monolithic entity from a single vendor. Switching between different vendor'...
More and more enterprises today are doing business by opening up their data and applications through APIs. Though forward-thinking and strategic, exposing APIs also increases the surface area for potential attack by hackers. To benefit from APIs while staying secure, enterprises and security architects need to continue to develop a deep understanding about API security and how it differs from traditional web application security or mobile application security. In his session at 14th Cloud Expo, Sachin Agarwal, VP of Product Marketing and Strategy at SOA Software, will walk you through the various aspects of how an API could be potentially exploited. He will discuss the necessary best practices to secure your data and enterprise applications while continue continuing to support your business’s digital initiatives.
You use an agile process; your goal is to make your organization more agile. What about your data infrastructure? The truth is, today’s databases are anything but agile – they are effectively static repositories that are cumbersome to work with, difficult to change, and cannot keep pace with application demands. Performance suffers as a result, and it takes far longer than it should to deliver on new features and capabilities needed to make your organization competitive. As your application and business needs change, data repositories and structures get outmoded rapidly, resulting in increased work for application developers and slow performance for end users. Further, as data sizes grow into the Big Data realm, this problem is exacerbated and becomes even more difficult to address. A seemingly simple schema change can take hours (or more) to perform, and as requirements evolve the disconnect between existing data structures and actual needs diverge.
SYS-CON Events announced today that SherWeb, a long-time leading provider of cloud services and Microsoft's 2013 World Hosting Partner of the Year, will exhibit at SYS-CON's 14th International Cloud Expo®, which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. A worldwide hosted services leader ranking in the prestigious North American Deloitte Technology Fast 500TM, and Microsoft's 2013 World Hosting Partner of the Year, SherWeb provides competitive cloud solutions to businesses and partners around the world. Founded in 1998, SherWeb is a privately owned company headquartered in Quebec, Canada. Its service portfolio includes Microsoft Exchange, SharePoint, Lync, Dynamics CRM and more.
The world of cloud and application development is not just for the hardened developer these days. In their session at 14th Cloud Expo, Phil Jackson, Development Community Advocate for SoftLayer, and Harold Hannon, Sr. Software Architect at SoftLayer, will pull back the curtain of the architecture of a fun demo application purpose-built for the cloud. They will focus on demonstrating how they leveraged compute, storage, messaging, and other cloud elements hosted at SoftLayer to lower the effort and difficulty of putting together a useful application. This will be an active demonstration and review of simple command-line tools and resources, so don’t be afraid if you are not a seasoned developer.
SYS-CON Events announced today that BUMI, a premium managed service provider specializing in data backup and recovery, will exhibit at SYS-CON's 14th International Cloud Expo®, which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. Manhattan-based BUMI (Backup My Info!) is a premium managed service provider specializing in data backup and recovery. Founded in 2002, the company’s Here, There and Everywhere data backup and recovery solutions are utilized by more than 500 businesses. BUMI clients include professional service organizations such as banking, financial, insurance, accounting, hedge funds and law firms. The company is known for its relentless passion for customer service and support, and has won numerous awards, including Customer Service Provider of the Year and 10 Best Companies to Work For.
Chief Security Officers (CSO), CIOs and IT Directors are all concerned with providing a secure environment from which their business can innovate and customers can safely consume without the fear of Distributed Denial of Service attacks. To be successful in today's hyper-connected world, the enterprise needs to leverage the capabilities of the web and be ready to innovate without fear of DDoS attacks, concerns about application security and other threats. Organizations face great risk from increasingly frequent and sophisticated attempts to render web properties unavailable, and steal intellectual property or personally identifiable information. Layered security best practices extend security beyond the data center, delivering DDoS protection and maintaining site performance in the face of fast-changing threats.
From data center to cloud to the network. In his session at 3rd SDDC Expo, Raul Martynek, CEO of Net Access, will identify the challenges facing both data center providers and enterprise IT as they relate to cross-platform automation. He will then provide insight into designing, building, securing and managing the technology as an integrated service offering. Topics covered include: High-density data center design Network (and SDN) integration and automation Cloud (and hosting) infrastructure considerations Monitoring and security Management approaches Self-service and automation
In his session at 14th Cloud Expo, David Holmes, Vice President at OutSystems, will demonstrate the immense power that lives at the intersection of mobile apps and cloud application platforms. Attendees will participate in a live demonstration – an enterprise mobile app will be built and changed before their eyes – on their own devices. David Holmes brings over 20 years of high-tech marketing leadership to OutSystems. Prior to joining OutSystems, he was VP of Global Marketing for Damballa, a leading provider of network security solutions. Previously, he was SVP of Global Marketing for Jacada where his branding and positioning expertise helped drive the company from start-up days to a $55 million initial public offering on Nasdaq.
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 14th Cloud Expo, Marc Jones, Vice President of Product Innovation for SoftLayer, will explain how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.