Compliance Outlook

Cloud Computing

Cloud Computing

Cloud computing is a technological advancement that can be advantageous to credit unions because of potential benefits such as: cost reduction, flexibility, scalability, improved load balancing, and speed.

Cloud ComputingThe Federal Financial Institution Examination Council (FFIEC) considers cloud computing to be another form of outsourcing with the same basic risk characteristics and risk management requirements as traditional forms of outsourcing.

Cloud ComputingWhen considering a cloud computing solution it is required that credit unions evaluate:

• Data Classification;• Data Segregation; and • Recoverability.

Cloud Computing

The credit union may have to provide additional controls to manage a cloud computing service provider.

Cloud Computing

The credit union must have agreements that are specific as to the ownership, location and format of the credit union’s data, and dispute resolution processes.

Cloud ComputingThe FFIEC states that “Financial institutions that contemplate or use a cloud computing model in which all or part of the service is outsourced have to consider the fundamentals of risk and risk management defined in the FFIEC Information Technology Examination Handbook, especially the Outsourcing Technology Services Booklet.”

Cloud ComputingThe credit union’s management process for cloud computing resources should include effective monitoring of security-related threats, incidents, and events on both credit unions and servicers networks; comprehensive incident response methodologies; and maintenance of appropriate forensic strategies for investigation and evidence collection.

Cloud ComputingOften these solutions are provided overseas, due to the cost benefits. If this is the case the provider may not be aware of or comply with the myriad of regulatory requirements credit unions must comply with, including: privacy, security incidence response, record retention, and information technology requirements.

Thank you for joining me for this review of Cloud Computing.

Shawn Wolbert, CIA, CUCEDirector CU System Relations

101 S. Washington Square, Suite 900Lansing, MI 48933-1703(800) 262-6285 Ext. 486(734) 658-5427 MobileFollow me on Twitter – Shawn Wolbert @ Go2CUGuru

Cloud ComputingResources:FFIEC Guidance: http://ithandbook.ffiec.gov/media/153119/06-28-12_-_external_cloud_computing_-_public_statement.pdf

FFIEC IT Handbook: http://ithandbook.ffiec.gov/it-booklets.aspx

FFIEC Outsourcing Technology Services: http://ithandbook.ffiec.gov/it-booklets/outsourcing-technology-services.aspx