Independent Banker - March 2018 - 86

Nuts & Bolts
" Like all banks,
[community banks]
are looking for
anything to reduce
spending, and cloud
computing is simply
a cheaper way to do
data management. "
-PETER CHERPACK, ARDMORE
BANKING ADVISORS
often escape corporate perimeter
controls, " Ullrich says. " If not implemented
in a controlled fashion, this
can lead to insecure services exposed
directly to the hostile internet
without sufficient authentication. "
For example, cloud service users
often have issues with insecure
implementations of storage services,
such as Amazon S3, or databases
deployed with cloud service providers.
In addition, Ullrich says the ease
and low cost of cloud services can
lead to the emergence of so-called
shadow IT, the uncontrolled and
insecure use of cloud services by
individuals outside of traditional IT
roles (as would be the case if bank
employees used free GitHub accounts
to develop proprietary code, or
stored bank or work data on public
cloud services like Dropbox without
sufficient monitoring).
Despite the potential security
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issues, cloud computing is " ready for
prime time, " according to Peter Cherpack,
executive vice president and
director for Ardmore Banking Advisors,
a credit risk consulting firm that
works with community banks. " Like
all banks, [community banks] are
looking for anything to reduce spending,
and cloud computing is simply a
cheaper way to do data management, "
he says. Increasingly, community
banks are looking to cloud services
and cloud architectures to run core
accounting systems and other crucial
operations, such as loan origination
and regulatory reporting.
The use of cloud services and
systems can provide a 30 percent
(or greater) cost savings, according
to Cherpack. But cloud service
providers vary greatly in their ability
to handle bank customers' security
and compliance needs. For example,
Cherpack cites one community bank
client who had to " drag their cloud
vendor through the compliance
process. Some vendors just are not
properly prepared. "
Unforeseen ramifications
Cloud computing is, for better or
worse, a case of out of sight, out
of mind. As more and more cloud
servers replace in-house servers,
they are often " not added to proper
inventories and are easily forgotten, "
Ullrich says. " As a result, they are
not properly secured, monitored, or
maintained or patched. These servers
will often be compromised and used
to attack other assets, either within
the organization that deployed them,
or resources at other companies. "
These compromised cloud servers
make up a large number of malicious
systems used to host malware;
they are difficult to identify and
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Independent Banker - March 2018

Table of Contents for the Digital Edition of Independent Banker - March 2018
