Can the Cloud be Trusted With Your Financial Information?

Unless you’ve been living under a rock, you’ve at least heard of “the cloud.” But that term is a bit of a misnomer. There isn’t just one cloud. A cloud is a generic term for data storage that occurs over multiple servers rather than on the user computer. The biggest advantages of cloud storage for the average computer user are accessibility and data recovery.

Your data is available anywhere, and you don’t have to worry about backing up your data. Companies are also attracted to cloud storage for the potential cost savings and the avoidance of maintenance tasks. They only pay for the storage that is actually used.

But cloud storage does have drawbacks. More people potentially have access to the data. That includes nearly every employee of the cloud storage firm. The data can also be less secure due to the nature of the storage. It’s constantly being copied and moved around the servers.

The question is: Can the cloud be trusted with your financial data?

Points to consider regarding cloud security:

1. Not all clouds are created equal. Not all safes are created equal. There’s the inexpensive security container that resembles your high school locker, and then there’s the vault at your local bank. A similar variety of options exist within cloud storage. Some options are undoubtedly very insecure while others would be challenging for the NSA to crack.

2. Encryption is a powerful tool. The encryption used by the federal government is available for free to the public. The rumor is that even the government is unable to decipher the encryption. The most popular option is Pretty Good Privacy (PGP).

* Some cloud storage firms provide their own encryption options. Experts agree that encrypting the data on your home computer prior to uploading is the best option. Remember that if the cloud provider encrypts the data, they can still decrypt it, too. That’s not true if you do it yourself.

3. Many cloud storage services specialize in a particular industry. Some providers specialize in finance. Another may specialize in health care or manufacturing. A certain level of expertise for your data type can be invaluable. Different fields require different levels of service and security.

4. Get the level of service that you need. There are multiple levels of service within each cloud storage platform. What level of backup and disaster recovery do you need? Some firms keep a backup offsite in case of a fire or other disaster. The SLA, or service-level agreement, will detail the features of your service.

5. What are the recovery options? How quickly can your data be recovered? What support is provided? Many services provide excellent backup services but the recovery side leaves a lot to be desired. Ensure you can get your data back quickly and easily. Some firms will even mail a hard drive with your data to you.

6. Ask about the most recent security audit. Inquire whether they will share the results with you. Ask what has been done to correct the deficiencies. Security threats are constantly evolving. A company that doesn’t perform regular security audits cannot stay current.

Storing your financial data on the cloud can be very convenient. Via cloud storage, you can easily access your data with your desktop, laptop, tablet, or Smartphone. You can access your data anywhere you have an internet connection. But this convenience isn’t free. Your data can be more accessible to others if the proper precautions aren’t taken.

Ensure that the necessary level of security exists within the cloud storage option you ultimately choose. You’ll sleep better at night knowing that your data is safe.

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