Financial institutions look to cloud with skepticism

By Rhonda J. Miller
PBN Staff Writer

Some banks that do business in Rhode Island are easing into the global trend to use cloud computing service, or processing and storing data on servers not owned by the company either on rented server space they control, generally called the “private cloud,” or shared servers, called the “public cloud.” More

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FOCUS: BANKING & FINANCE

Financial institutions look to cloud with skepticism

By Rhonda J. Miller
PBN Staff Writer

Posted 9/16/13

Some banks that do business in Rhode Island are easing into the global trend to use cloud computing service, or processing and storing data on servers not owned by the company either on rented server space they control, generally called the “private cloud,” or shared servers, called the “public cloud.”

Still, financial institutions’ acceptance of cloud computing, even for selected, less-sensitive applications, duels with skepticism about the ability to guarantee security in precarious cyber-territory.

Webster Bank has an internal “private cloud” for processing data and is also going along with an increasing trend by companies to use the “public cloud.”

“We will continue to implement ‘in-house’ application in our private, virtualized environment, while partnering with vendors who provide software solutions from a public cloud,” said Webster Bank Chief Information Officer Colin Eccles.

Savings Institute Bank & Trust, which acquired NewportFed on Sept. 6, uses private-cloud computing, but carefully chooses how those services are used, said President and CEO Rheo Brouillard.

“We do not use any public-cloud services for any applications, but rely, primarily for proprietary and confidentiality of information reasons, on dedicated private servers,” said Brouillard.

BankNewport uses cloud computing for human resources applications, said Chief Information Officer Colleen Medeiros.

That’s an example of an application some in the financial industry said makes good use of cloud computing to process data, while keeping customers’ sensitive financial information on privately controlled computers.

“We are not using cloud computing for our internal bank network and do not have plans to do so, due to regulatory scrutiny and the GLBA,” said Medeiros.

The GLBA is the Gramm-Leach-Bliley Act, passed in 1999, to ensure that financial institutions protect consumers’ confidential information.

Threats to the security of confidential information override the advantages of cloud computing for financial institutions, in the opinion of Francesca Spidalieri, cyber-leadership fellow at Salve Regina University’s Pell Center for International Relations and Public Policy.

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