The value of colocation providers continues to grow hand in hand with the proliferation of cloud computing. Business leaders across the globe are seeing the value of this nascent technology because of its ability to streamline operations in a variety of ways. It can significantly ease the processes of data storage, access, sharing and backup and reduce a company's carbon footprint as well.
Despite the vast array of benefits associated with cloud computing, many chief executives continue to express caution. Tech engineers and IT managers have made great strides with cybersecurity methods such as encryption, decentralization and biometrics. However, these developments haven't been enough to quell fears of cyberattacks, especially in the aftermath of high-profile data breaches against Sony Pictures and bitcoin, to name a few.
Data center colocation can be a great option for businesses that want to expand their cloud storage capacity without committing to a major new investment. That said, this strategy will prosper only if cloud users feel comfortable with the technology. And perhaps no sector is more focused on cybersecurity than banking.
The cyber threat against banks
According to The Guardian, a group of multinational cybercriminals pilfered up to $1 billion over a two year period from more than 100 banks in 30 countries. The news outlet also noted that the Bank of England alerted financial institutions in the United Kingdom about the ubiquitous threat of cybercrime.
Zero day attacks – a data breach before a cybersecurity measure has been enacted – are posing some of the greatest risks to banks in the U.K.
"If I was a customer of that bank and they weren't protecting against zero day attacks, I'd take my money out of there," Steve Bell, spokesman for Bullguard, an internet security firm, told the news outlet. "If a bank hasn't got defenses against zero day attacks, they really don't have a handle on cybersecurity."
U.K. banks spend at least 700 million euros per year on cybersecurity, however, the problem is still quite prevalent. Even a seemingly minor attack against a personal account can lead to broad ramifications for a banking service.
"If hackers can access 2 million accounts and siphon off a little bit from each, they can scoop up millions, and the bank probably wouldn't want to publicize this," Joram Borenstein, a spokesperson for Nice Actimize, an IT security group for global financial firms, told the news outlet. "We don't read about attacks on the banks on a daily basis, but I know for a fact in the UK that it's a regular occurrence. The major banks have teams monitoring alerts, unusual behavior and spikes in activity, 24/7."
New York financial leader calls for more stringent bank security
Benjamin M. Lawsky, the superintendent of Financial Services in New York, said that his office is mulling the idea of mandating senior bank executives to prove the strength of their security systems against money laundering and cyberattacks, according to The Wall Street Journal.
The consideration arrives in the midst of regular cyber threats against Wall Street banks. J.P. Morgan Chose & Co. recently noted that a cyberattack this past summer affected approximately 76 million households.
"If this proposal is enacted, as seems likely, senior executives will personally be on the hook for faulty [anti-money laundering] controls, a potentially scary prospect, and one that should cause them to become as personally involved in compliance as they are in financial reporting," Matthew Schwartz, a partner with Boies, Schiller & Flexner LLP, told the news outlet.
Colocation solutions can be an effective way for cloud users to bolster data center performance without heavily cutting into their bottom line. However, the colocation market will reach its true potential as companies enact needed cybersecurity measures as well.