Safeguarding Financial Services in the Multicloud Era

Financial services organizations—whether through mergers, partnerships, or account holder engagement requirements—find themselves at the forefront of adopting multicloud strategies. According to a recent survey by F5, a staggering 71% of financial services organizations have embraced multicloud approaches to meet their diverse needs, like a unique application resource requirement driving a specific hyperscaler choice. Unfortunately, the increased complexity that often comes with properly managing multicloud environments can demand extra resources and attention. To compound the situation, building and maintaining a consistent security posture across their application and API portfolios in a distributed environment is an increasing challenge for security teams, where the cost of a data breach is $5.9 million on average in financial services.

Financial services institutions are also uniquely navigating the intricacies of contending with IT considerations for the evolving open finance ecosystems, with a recent Jack Henry study citing 90% planning to embed fintechs into their digital banking platforms. That adds up to many new third-party provider API connections to secure and maintain, including data-intensive aggregators, which regulators can be quick to fine when anti-money laundering (AML) and know your customers (KYC) standards are not upheld.

While the good news is public cloud providers offer native networking and security capabilities that suffice for many use cases in multicloud environments, notable gaps do exist. For example, when your apps get scaled across environments it can ultimately lead to both having less granular control over your portfolio performance and a lack of ability to manage consistent security policies across different cloud providers. To fill these gaps, technology leaders are turning to new secure multicloud networking services (SMNS). This signifies a paradigm shift in how financial services can utilize innovative solutions to greatly enhance their application delivery and security capabilities in a multicloud era.

As institutions expand and scale applications across clouds, there’s a risk of increasing complexity, losing visibility, and ultimately having less granular control over the portfolio. In fact, 9 of 10 organizations report multicloud challenges, including complexity of tools, troubleshooting procedures, and APIs.

SMNS emerge as a strategic choice for financial services technology leaders seeking to simplify the complexities associated with multicloud management. With better simplification, like an API-first infrastructure solution that can offer a unified interface, financial services institutions gain more control over their entire application stack with solutions that are platform-independent. This also enables policy governance through automation and accelerated fault remediation.

Legacy security solutions are struggling to keep up in the multicloud era. In a Cybersecurity Insiders report, 78% say traditional security solutions don’t work for the cloud. To put it simply, financial services security teams need agile tools that work in any environment that help simplify their user experience. This allows them to focus on stopping threats across their distributed architecture.

The adoption of SMNS simplifies the implementation of security by providing end-to-end, cloud-based centralized management of security policies across distributed environments. For example, when you need to build exclusions against a specific false positive, you can easily deploy this from a central console. You can also, for instance, streamline the consistent use of your API reputation filter, a task that’s especially helpful to better manage aggregator API endpoints. These examples along with many other associated ones, allow for an improved, detailed focus on application and API security in financial services, enabling organizations to meet multicloud security challenges with greater consistency and agility.

As multicloud strategies become the norm, adopting a layered security architecture is imperative to fortifying defenses and ensuring comprehensive and consistent protection in any environment. A vertical security architecture now requires complimentary controls like application layer 7 DDoS, identity management, and web application and API protection that are key elements to defense in depth and are becoming table stakes for modern enterprises. Additionally, as detailed above, a crucial aspect of a layered security architecture is the incorporation of consistent security policies across all IT environments and stacks, so they can properly identify and remediate critical threats like the Log4j2 vulnerability.

This is especially important in the financial services industry, with the evolving complexities associated with growing open finance ecosystems. Embedded finance and banking as-a-Service innovations, for example, are changing the landscape with almost 50% of financial institutions planning to embed their financial services into third parties in the next two years.

With the right SMNS in place, financial services organizations can more confidently navigate the complexities of distributed environments and open finance ecosystems with greater visibility and streamlined security operations, mitigating the risk of the loss of sensitive PII and financial data.