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Security in a Cloud Computing Environment

By Adam Reynolds | Tuesday, June 16, 2020 - Leave a Comment

An Update to the FFIEC Outsourced Cloud Computing Document


Cloud Computing graphic

In April 2020, the FFIEC released their “Joint Statement on Risk Management for Cloud Computing Services” as an update to their 2012 statement “Outsourced Cloud Computing.” The 2012 statement was a short, four-page document that addressed the key elements of outsourced cloud computing as identified in existing guidance. In 2012, the FFIEC considered cloud computing services as just another form of outsourcing “with the same basic risk characteristics and risk management requirements as traditional forms of outsourcing.” While outsourced cloud computing still shares the basic risks as traditional outsourcing, the 2020 statement provides examples of risk management practices that are relevant and unique to this form of outsourcing. These key risk management practices should be reviewed and used by management when assessing, implementing, and monitoring outsourced cloud computing services.

In properly assessing an outsourced service, one must first be aware of the risks. The documents help to understand the basic risks of outsourcing, as well as those that are pertinent to cloud computing services. To begin with, careful due diligence and review of contracts is a must. The relationship between the Client and provider must fully be understood, as well as the risks and controls that address them. The responsibilities for assessing and implementing controls over the operation must be known, as many security controls rely on proper understanding and implementation by the administrator. It is also important to understand the data classification of any information transmitted, stored, or processed in the cloud and how that data is segregated. Business continuity plans and recoverability of data should also be assessed to make sure it falls in line with the institution’s requirements and risk tolerances. Additionally, the institution’s incident response plan should carefully delineate the responsibilities of each party and account for the specific challenges that cloud resources present (which can often be found when including cloud services in incident response tests).

Implementation of cloud computing services present many unique considerations as outlined in the 2020 document, but also many typical ones as well. Awareness and training are a key control to effectively implement and monitor many controls, and this hold true for cloud computing as well. Proper change management controls are important for safely and effectively transitioning data and systems to cloud environments. A robust inventory process should also be in place to help facilitate other key processes such as secure configuration management and vulnerability management, as misconfiguration of cloud resources and unpatched applications are a common source of vulnerabilities in this environment.

Monitoring and oversight of cloud services is as critical of a practice as ever to ensure information is properly protected and the provider is meeting their contractual obligations. Regular testing and auditing of security controls and configurations to confirm that controls are properly configured, and working is one of the most important processes for security. Technical, administrative, and physical security controls protecting information assets should also be evaluated and monitored as shown in the documents, through items such as independent assurance reviews, reviewing security and activity reports from the cloud service provider, or other activities.

Outsourcing to cloud providers can provide many advantaged to your institution, but the additional risks should be thoroughly understood throughout the processes of assessment, implementation, and monitoring. The 2012 and 2020 joint statements highlight the existing guidance pertinent to cloud services as well provide examples of risk management practices for assessing risks and implementing controls in a cloud environment. Management should read both of these statements and compare their current policies and procedures against them to confirm compliance with guidance and to understand the risks and controls involved, helping to ensure a safe and effective use of cloud services.


Original article by Adam Reynolds, Senior Staff Auditor, infotex


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