Click here to close now.

Welcome!

AJAX & REA Authors: Elizabeth White, Pat Romanski, Liz McMillan, Adrian Bridgwater, David Miller

Related Topics: Cloud Expo, Java, Microservices Journal, 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.


@CloudExpo Stories
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading in...
MeriTalk, a public-private partnership focused on improving the outcomes of government IT, today announced the results of its new report, "The Agile Advantage: Can DevOps Move Cloud to the Fast Lane?" The study, underwritten by Accenture Federal Services, reveals that approximately two-thirds of Feds say DevOps will help agencies shift into the cloud fast lane - improving IT collaboration and migration speed. But help is needed, with 66 percent saying that their agency needs to move IT services ...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. 8th International Big Data Expo, co-located with 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. As advanced data storage, access and analytics technologies aimed at handling high-volume and/or fast moving data all move center stage, aided by the cloud computing bo...
Move from reactive to proactive cloud management in a heterogeneous cloud infrastructure. In his session at 16th Cloud Expo, Manoj Khabe, Innovative Solution-Focused Transformation Leader at Vicom Computer Services, Inc., will show how to replace a help desk-centric approach with an ITIL-based service model and service-centric CMDB that’s tightly integrated with an event and incident management platform. Learn how to expand the scope of operations management to service management. He will al...
Every day we read jaw-dropping stats on the explosion of data. We allocate significant resources to harness and better understand it. We build businesses around it. But we’ve only just begun. For big payoffs in Big Data, CIOs are turning to cognitive computing. Cognitive computing’s ability to securely extract insights, understand natural language, and get smarter each time it’s used is the next, logical step for Big Data.
Enterprises are fast realizing the importance of integrating SaaS/Cloud applications, API and on-premises data and processes, to unleash hidden value. This webinar explores how managers can use a Microservice-centric approach to aggressively tackle the unexpected new integration challenges posed by proliferation of cloud, mobile, social and big data projects. Industry analyst and SOA expert Jason Bloomberg will strip away the hype from microservices, and clearly identify their advantages and d...
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developmen...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
Over the years, a variety of methodologies have emerged in order to overcome the challenges related to project constraints. The successful use of each methodology seems highly context-dependent. However, communication seems to be the common denominator of the many challenges that project management methodologies intend to resolve. In this respect, Information and Communication Technologies (ICTs) can be viewed as powerful tools for managing projects. Few research papers have focused on the way...
As the world moves from DevOps to NoOps, application deployment to the cloud ought to become a lot simpler. However, applications have been architected with a much tighter coupling than it needs to be which makes deployment in different environments and migration between them harder. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, Netflix and so on is at the heart of CloudFoundry – a complete developer-oriented Platform as a Service (PaaS...
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises a...
High-performing enterprise Software Quality Assurance (SQA) teams validate systems that are ready for use - getting most actively involved as components integrate and form complete systems. These teams catch and report on defects, making sure the customer gets the best software possible. SQA teams have leveraged automation and virtualization to execute more thorough testing in less time - bringing Dev and Ops together, ensuring production readiness. Does the emergence of DevOps mean the end of E...
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, ...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
Enterprises are turning to the hybrid cloud to drive greater scalability and cost-effectiveness. But enterprises should beware as the definition of “policy” varies wildly. Some say it’s the ability to control the resources apps’ use or where the apps run. Others view policy as governing the permissions and delivering security. Policy is all of that and more. In his session at 16th Cloud Expo, Derek Collison, founder and CEO of Apcera, will: Explain what policy is; Show how policy should be arc...
The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential. The DevOps Summit at Cloud Expo – to be held June 3-5, 2015, at the Javits Center in New York City – will expand the DevOps community, enable a wide...
T-Mobile has been transforming the wireless industry with its “Uncarrier” initiatives. Today as T-Mobile’s IT organization works to transform itself in a like manner, technical foundations built over the last couple of years are now key to their drive for more Agile delivery practices. In his session at DevOps Summit, Martin Krienke, Sr Development Manager at T-Mobile, will discuss where they started their Continuous Delivery journey, where they are today, and where they are going in an effort ...
The OpenStack cloud operating system includes Trove, a database abstraction layer. Rather than applications connecting directly to a specific type of database, they connect to Trove, which in turn connects to one or more specific databases. One target database is Postgres Plus Cloud Database, which includes its own RESTful API. Trove was originally developed around MySQL, whose interfaces are significantly less complicated than those of the Postgres cloud database. In his session at 16th Cloud...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...