Pub. 7 2012-2013 Issue 5

www.nebankers.org 16 Extraordinary Service for Extraordinary Members. Choosing a Cloud Hosting Provider Nathan Dahlstrom , CoNetrix T HE PROBLEM IS MULTIFACETED. Whether you need to add an- other IT professional, remodel and expand the server room, upgrade your servers, or buy new soft- ware technology, IT has grown like a monster in the closet. That’s when someone brings up “the cloud.” The Federal Financial Institutions Examination Council (FFIEC) defines cloud computing as “a migration from owned resources to shared re- sources.” For the first time since you bought your first server, the cloud has presented a real solution to stop the ever-expanding nature of bank IT and bank IT costs. So how do you go about leveraging the power and savings of the cloud? The answer lies in which com- pany you choose to host your cloud. TECH TALK Sometime in the last 12 months someone at your bank has likely said, “We have to cut IT costs!” A simple web search for “cloud host- ing” will reveal pages of companies soliciting cloud hosting business. They each offer unlimited services from ap- plication hosting to disaster recovery. Their pricing menus are as varied as their flashy logos and websites. Do you choose based on pricing structure, location, company history, network options, or some other feature? The jargon involved is complex and many times contradictory. The most important question for your bank in finding a cloud hosting provider is this: Who can I trust with our data? Hosting any data function of your bank will require you to trust and know that organization like an em- ployee. A company hosting your data should be considered a business part- ner, not simply a third-party vendor. After all, they will have your data and your customers’ data. They will have your very livelihood as a banking in- stitution. The FFIEC report on cloud hosting explained it this way: A financial institution’s use of third parties to achieve its stra- tegic plan does not diminish the responsibility of the board of directors to ensure that the third party activity is conducted in a safe and sound manner and in compliance with all applicable laws and regulations. That means you are still respon- sible for the security and protection of your data even though you have hired another business to manage it. You are still accountable as the primary recipi- ent and manager of the data. A cloud hosting provider needs to be chosen like you are hiring a bank president: The company needs to be interviewed multiple times; it must have a proven track record in your industry; its references must be veri- fied; and you must feel you can trust the organization. If you can, choose a company you know.