The most common cloud security risks include data privacy issues, such as data location and segregation, and privileged access control. However, by selecting the right cloud model for your business and by working with a reputable and trusted technology partner, you can ensure that you know where and how your data is stored, as well as the types of security measures that are in place. A technology partner can help ensure maximum reliability and regulatory compliance by completely managing all maintenance and monitoring of the cloud infrastructure. With cloud management provided through a trusted technology partner, security patching can be automated, and all applications, such as email, CRM systems, trading platforms, and accounting systems, can be kept up to date and running on secure systems within the service provider’s infrastructure.
Many cloud platforms allow administrators to monitor and review employee actions on the network, as well as block or make updates to control usage based on employee status. This helps mitigate the risk associated with data privacy, location, and segregation. When moving to the cloud, hedge funds should focus on four key areas to understand the level of security: the features that are built into the cloud provider’s offering; how data is segregated from that of other users on the cloud; where the cloud provider’s infrastructure resides and what type of hardware is used; and finally, who has access to the cloud provider’s infrastructure and how these individuals are screened. Understanding which services are bundled into the provider’s cloud will clarify the level of security that will be used to protect private data.
Security features that are necessary for maintaining a secure cloud environment include web filtering, intrusion detection and prevention, data encryption, and multifactor authentication. When it comes to infrastructure, data should be housed in data centers that are designated as SAS70/SSAE16 Type II and SOC 1/2, as well as ISO 27001 certified. The data center should also adhere to all SEC/FINRA/FCA standards to ensure compliance with regulations.
Disaster recovery (DR) and managed backup services are also becoming an increasingly important part of cloud security. DR replicates data and technology functions in real time to an offsite location, and enables firms to restore operations to an offsite location quickly, preventing interruption to the workday if the event renders the primary worksite unusable. Managed backup services copy and archive files and folders in the case that the data is lost in the case of an incident, and is best utilized as a component of a DR strategy rather than as a standalone solution. Clouds that are built with security in mind using these enhanced features reduce the chance of many types of attacks, such as spear phishing attacks or advanced persistent threats, by allowing administrators to quickly identify and mitigate network abnormalities.