Tech clients eye cloud services to minimise cost of managing risks

Written by Rachana Khanzode | Updated: Oct 5 2010, 05:37am hrs
Post meltdown, banking, insurance and financial services (BFSI) firms are increasingly using IT to automate a number of human controlled processes. Therefore, risks around legal implications, due to technology driven decisions have gone up. To do away with the information and systems risks, technology clients are looking at cloud computing services to minimise the cost of managing such risks, said Robert Stroud, international vice-president at the Information Systems Audit and Control Association (ISACA). In an interaction with FEs Rachana Khanzode, Stroud says currently there are no standards around security of outsourcing the financial management systems. Excerpts:

What are the major technology adoptions that require risk management

Technology clients have been adopting automation over human control processes. The issue in the adoption of technology is that clients are losing out on the human expertise. This could have legal implications around information and technology systems, like, in transaction of data. Therefore, clients are going for risk management systems which in a way is leading to the adoption of cloud-computing. The cloud services minimise the cost of managing risks. However, we still see a lot of challenges around it.

What are the challenges that revolve around the adoption of cloud computing

Cloud-computing is increasingly coming to the minds of tech clients as they slowly come out of the economic downturn. But the very first challenge is how to leverage the cloud in terms of business implementation and deliver. Security is another challenge with the adoption of cloud services. However, the fundamental risk is whether clients can change their provider after adopting cloud services from a particular provider. At the same time, there are no standards around the security of outsourcing financial management systems.

What kind of clients are still adopting it

We are witnessing extensive adoption of cloud in the US and Europe markets. This is especially with firms that were hit during the downturn and want to reduce their capital and operational expenditure, internally and externally.

Which other areas are witnessing an adoption of governance and risk management

Social media is another area where corporate governance and risk management is much needed. Clients need to adopt staff training on how to use social media. Firms need to monitor social media in real time and react immediately to avoid repetition of any unwanted communication, as it could lead to liabilities.