FFIEC, on behalf of its members, issued a statement to address the use of cloud computing services and security risk management principles in the financial services sector. The statement highlights examples of risk management practices for a financial institution’s safe and sound use of cloud computing services and safeguards to protect the sensitive information of consumers. The statement also provides a list of government and industry resources and references to assist financial institutions using cloud computing services.
The statement does not contain new regulatory expectations, though it highlights that management should not assume that effective security and resilience controls exist simply because the technology systems are operating in a cloud computing environment. The statement identifies the responsibilities financial institutions would have when contracting with cloud computing providers. Examples of relevant risk management practices for assessing risks related to and implementing controls for cloud computing services include the following:
- The financial institution’s plans for the use of cloud computing services should align with its overall IT strategy, architecture, and risk appetite. This includes determining the appropriate level of governance, the types of systems and information assets considered for cloud computing environments, the impact on the financial institution’s architecture and operations model, and management’s comfort with its dependence on and its ability to monitor the cloud service provider.
- Appropriate due diligence and ongoing oversight and monitoring of cloud service providers’ security is required. As with all other third-party relationships, security-related risks should be identified during planning, due diligence, and the selection of the cloud service provider.
- Contracts between a financial institution and cloud service provider should be drafted to clearly define which party has responsibilities for configuration and management of system access rights, configuration capabilities, and deployment of services and information assets to a cloud computing environment, among other things.
- An effective inventory process for the use of cloud computing environments is an essential component for secure configuration management, vulnerability management, and monitoring of controls.
- Common practices for identity and access management for resources using cloud computing infrastructures include limiting account privileges, implementing multi-factor authentication, frequently updating and reviewing account access, monitoring activity, and requiring privileged users to have separate usernames and passwords for each segment of the cloud service provider’s and financial institution’s networks.
- Operations moved to cloud computing environments should have resilience and recovery capabilities commensurate with the risk of the service or operation for the financial institution. Management should review and assess the resilience capabilities and service options available from the cloud service provider.
The risk management considerations outlined in the statement provide a summary of key controls that management may consider as part of assessing and implementing cloud computing services. However, specific risk management and controls will be dependent on the nature of the outsourced services and the specifics of the cloud implementation. Additional information on general third-party risk management and outsourcing practices is available in the FFIEC Information Technology Examination Handbook’s “Outsourcing Technology Services” booklet and other documents published by the FFIEC members.
Keywords: Americas, US, Banking, Cloud Computing, Risk Management, Governance, Cyber Risk, FFIEC
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