Cloud Communications vs. Traditional IT Infrastructure: Which is More Secure?

It may be surprising to note that not all businesses are quick to adopt the Cloud despite its high scalability. Two such industries that are dragging behind most others in cloud adoption are the banking and financial industries.

The situation did change somewhat, and according to Deloitte, banking and financial services are slowly warming up to the Cloud and leaving the traditional IT infrastructure behind.

Cloud vs. Traditional IT Solutions

There are some financial institutions (FIs) who are still clinging to traditional IT infrastructure of on-premises servers, instead of migrating onto the Cloud. Traditional IT infrastructure requires a server to be installed directly on the premises, to which a desktop computer could be connected. This means all employees will have access to the business’ stored data.

The good side of this approach is having full control of your data and applications on the server. However, scaling is difficult as it requires buying extra hardware and necessitates an in-house IT department.

How does the Cloud compare?

• It is more flexible and has a greater scalability as you can scale cloud servers according to your business’ needs.
• Outsourcing data to a cloud server does not increase expenses; it decreases them as FIs no longer have to deal with managing their own IT infrastructure. No more installations or regular maintenance of servers.
• Easier to manage than in-house IT, typically because most of the tasks can be managed via the cloud’s online platform.
• Whereas IT infrastructure can suffer from downtime, this happens much less often with cloud servers, making the Cloud more reliable.
• Moving data to cloud servers will improve security portfolio with clients and partners, not impair it. Cloud security has its advantages for the finance industry the same as it does for any other industry.
• There is no loss of control or visibility when moving to the Cloud. Financial IT teams are still able to see data when it is in the Cloud and make any necessary changes.

Why are Financial Institutions slower to adopt Cloud Communications?

The reason for this is a bit complicated and has to do with outdated (and often obsolete) data protection laws in many countries, including those in the APAC region. According to these laws, data banks generated in one country must remain in that country. This puts banks in an awkward position. Even if they wanted to, many cannot outsource their data to the cloud server in another country.

Then there are those banks that, despite local laws allowing them to outsource their data to the Cloud, are still adamant against it. Their reasoning is fuelled by fear of what might happen to the data when it goes onto the Cloud. FIs like banks handle extremely sensitive data belonging to their clients and any data breach could prove to be disastrous for that bank.

According to Peak 10’s report on financial services in IT, more than half of the respondents (58%) said they fear they would lose control of their data if it is moved to the Cloud.

Cloud is More Secure, Data Says

Despite its benefits, FIs still name security concerns as the common hindrance to cloud adoption.

But the fact is, the world’s biggest corporation trusts in the Cloud, with 80% of Fortune 500s using Microsoft’s data centers to ensure their data is protected.

So what do you get in terms of security by migrating online? There are three main advantages:

1. Faster and more secure updates

Even the best security systems in the world need to be updated regularly, else it increases vulnerability to cyber attacks. With traditional IT, applying and testing new security patches and updates is time-consuming and often expensive. Cloud, however, provides you with the necessary tools to keep the cyber threats at bay and also allows you to automate your security updates.

2. Cloud offers better compliance

It’s easier to meet compliance standards with the Cloud than in-house. Plenty of cloud providers specialize in financial sector compliance, PCI, HIPAA and others. If your organization needs to comply with specific IT and government regulations and certification, you are probably aware of how difficult this can be sometimes. Cloud providers can deal with that for you as they already meet these requirements.

3. Multi-factor authentication

Traditional IT setups rely on passwords and usernames for authentication. People, however, forget their passwords all the time, or create one that’s too easy to figure out, not to mention the tendency to write them down on a piece of paper. Clearly, not the most secure solution.

The Cloud uses not only usernames and passwords for authentication, but also biometrics and tokens. Thus, offers a better protection from unauthorised data breaches.

Financial institutions shouldn’t let fear or doubt control their decisions regarding cloud adoption.

Sign up for a free account here to try our Messaging solutions or a free demo of our Video Interaction solution. You can also talk to us at hello@wavecell.com to learn more about the security of our cloud communication solutions for your business.