By Brandon Tanner
Cloud technology has received a significant amount of attention over the past year. Many financial institutions have had doubts about the cloud due to many infamous hackings. However, when considering cloud technology as it relates to credit unions, many executives have ignored the opportunity for enhanced member services due to several misconceptions. Some of the myths holding credit union executives from adopting cloud technology include the thought that cloud technology is too large for the average credit union, that the cloud is unsafe, or that all cloud solutions are equally safe.
Many executives believe that most cloud technology packages are too large for financially responsible, small to mid-sized credit unions. In reality, cloud technology is highly scalable and frequently is priced based on the number of users or the volume of data stored in the system. Additionally using cloud technology as a data recovery option is a decision that prevents financial institutions from serious fines associated with lost data.
One of the most pressing issues for credit union members is the question of security when considering cloud-based solutions. While the cloud has been under much criticism because of various high-profile hacking incidents, cloud security is more dependent on whether the network is a closed group or open to outsiders. Private or hybrid cloud offerings are much more secure than public cloud networks, which enable any individual to create a user profile without controls on who is able to access the network. By creating a network limited to members with active accounts and credit union employees, credit unions have the ability to maintain a secure cloud network.
When selecting a cloud technology solution, credit unions should confirm the technology’s compliance with relevant regulations. While many cloud providers claim their technology is compliant, all solutions considered compliant are not equally secure. For example, many technology solutions are only tested by the SOC 1 audit, which is based on controls around financial reporting. For optimal security, credit unions should select a cloud vendor able to pass a SOC2 audit, which checks for additional operational controls and service level agreement (SLAs) benchmarks that go way beyond SOC 1. By choosing a cloud technology provider that can pass a SOC2 audit, credit unions have the added assurance that their vendor has acceptable operational controls and SLAs in place.
Cloud technology offers credit unions the opportunity to expand their member services through mobile and flexible technology solutions. Cloud technology has gained an undeserved reputation that it is not secure, too large for credit unions and that all solutions claiming compliance are equally safe. Selecting the appropriate cloud provider should overcome each of these concerns. In order to grow, the financial industry needs to challenge the acceptance of these myths about cloud technology.
Brandon Tanner is senior manager at College Station, Texas-based Rentsys Recovery Services, a provider of comprehensive disaster recovery services for banks, credit unions, mortgage lenders and other organizations. For more information, please visit rentsys.com