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Encryption as a Service Is a Must-Have for the Cloud By @VaughanEmery | @CloudExpo #Cloud
Financial services industry’s recent embrace of cloud shows that cloud’s benefits don’t have to come at the expense of security
By: Vaughan Emery
Jul. 18, 2015 04:00 PM
Encryption as a Service Is a Must-Have for the Cloud
The cloud isn't a fad. Businesses that don't make the move are falling behind the competition. According to a recent ComputerWorld study, more than 40% of IT executives said that their organizations will spend more on Software as a Service (SaaS) and a mix of public, private hybrid and community clouds in 2015.
Companies of all sizes are increasing spending and transitioning to the cloud due to the slew of bottom-line and competitive benefits including efficiency, cost and, in some cases, security.
Smaller organizations often see the cloud as a way to improve security. One reason is because the provider of the hosted services is larger, so it has the financial and staff resources to implement patches and other security updates as soon as vendors release them. By comparison, SMB IT staffs are often overworked, so patches and upgrades get pushed to the back burner. Those delays create windows of opportunity for hackers.
Another reason why the cloud often is more secure is that the host's reputation and revenue are at stake. A security breach would undermine its ability to attract and retain customers, so quickly implementing the latest technologies and strategies becomes a top priority.
However, the cloud also presents its own challenges to security. The cloud architecture means their data now resides somewhere other than their premises and it has to travel over someone else's network to get there. Large organizations are skeptical that the hosting companies, WAN providers and other entities will be as diligent about protecting their data when it's at rest and in motion.
These concerns are fanned by high-profile cloud breaches - such as the recent attack on U.S. Government personnel including at least 4 million federal workers, as well as breaches of Dropbox, Anthem, JPMorgan Chase, Snapchat, Sony and Target - which prompt CIOs, CSOs and IT managers to say: "See? This is exactly what I want to avoid." The nightmare scenario is a breach so big that it attracts the attention of regulators, and the victimized company winds up with a law nicknamed after it.
Besides being embarrassing, breaches also are expensive. For example, a Ponemon Institute study found that the average total cost of a data breach is $3.8 million. The study also found that the average cost incurred for each lost or stolen customer record costs $154. A breach involving 50 million customers - the size of recent hacks on major retailers and financial services firms - would cost the company involved billions of dollars. The attack on health insurer Anthem involved roughly 80 million policyholders, which suggests that the scale of hacks will continue to increase.
Some barriers to cloud adoption are due to the industry or country where a business operates. For example, hospitals, physicians groups and insurance providers often are concerned that the cloud will increase the cost and complexity of complying with regulations such as the Health Insurance Portability and Accountability Act (HIPAA). Merchants, credit card processors, banks and other organizations involved with financial transactions have similar concerns about how a cloud migration will affect their ability to comply with the Payment Card Industry Data Security Standard (PCI DSS).
The bottom line is that although organizations in the financial services verticals typically recognize the savings and other benefits of the cloud, security concerns historically have been insurmountable barriers. But that's starting to change. For example, CEB TowerGroup predicts that financial services firms worldwide will spend more than $27 billion on private and public cloud services in 2015. They spent just $4 billion in 2010, which means their cloud investments have an aggressive compound annual growth rate of 52 percent.
Financial services industry's recent embrace of the cloud shows that the cloud's benefits don't have to come at the expense of security. For organizations in other verticals, the takeaway is that if financial services - one of the most heavily regulated, risk-averse and security-minded industries - now believe the cloud can be secure, it's time for them to take a fresh look, too.
By implementing Encryption as a Service (EaaS), financial services, healthcare and other industries can achieve the benefits from the cloud - flexibility, scalability and cost-efficiency - with no tradeoffs in security, as well as remain in compliance with regulations and standards.
For example, an organization can implement encryption for cardholders' primary account numbers (PANs), so that even if a hacker gets PANs, they're unreadable. This eliminates the cost, risk and hassle for the financial institution and its customers.
However, not all encryption is created equal. Savvy companies understand that data must be encrypted while in transit, at rest and at the end point. Any weak point in the transfer of data could provide an opening for hackers to breach a company's information. Another example is how they handle key management, which gets complex when it involves thousands or millions of keys. (A 2013 Ponemon Institute study found that enterprises have an average of 17,807 keys and certificates). If a key a lost, so is the data that it locks up.
End-to-end encryption also not only helps organizations mitigate external data breaches, but also helps to prevent accidental internal breaches. Businesses often implement the cloud as a way to better support their employees and/or customers use of mobile devices. Those endpoints compound risks and costs, such as when those devices are lost or stolen and data is unencrypted, which is often: roughly 29 million annually, by some estimates. Each one is an opportunity for a hacker to obtain at least the owner's account and other private information, if not also to use that device as a back door into the cloud to steal other customers' information, too. Rogue devices and applications continue to propel online fraud, which has increased 12% during the past year.
In addition to external and internal data breaches, enterprises can use end-to-end encryption solutions to help mitigate Distributed Denial of Service (DDoS) attacks, where a hacker floods the servers with bad requests that consume valuable computing and network resources. These attacks significantly disrupt the network, preventing customers from accessing their services via the institution's website or mobile app. According to a Kaspersky Lab study, DDoS attacks attribute to more than $1 billion in losses worldwide for banks and other financial services companies alone, as well as damaging the company's reputation.
By using a robust key exchange process to make it nearly impossible to compromise a secure session, new end-to-end encryption solutions are not susceptible to the typically exploited flaws in the Secure Sockets Layer (SSL) that most hackers target.
Security remains the biggest barrier not only to cloud adoption, but also to all of the bottom-line and competitive benefits that off-premise computing enables. By implementing EaaS, enterprises of all sizes can achieve those benefits with no tradeoffs in security, user experience, network performance and cost.
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