Organizations in today’s finance industry are entrusted with securely and efficiently handling ever-increasing volumes of data, which is why a successful IT strategy is critical to the success of any financial services firm. This urgency has been heightened by the increasing shift to mobile banking, investing, and payments.
While large financial services firms may have the financial means to create and maintain their own data centers, many smaller firms rely on server colocation to meet their IT requirements. Customers can buy and keep their own servers while using colocation facilities, which provide racks, security, electricity, cooling, fire protection, and network access. In a nutshell, colocation uses economies of scale to save money for businesses with limited IT resources.
However, in order to meet the needs of the financial services industry, colocation facilities must retain the necessary certifications. The most relevant certifications for facilities managing the workloads of financial services businesses are ISO 27001, PCI DSS, and FISMA.
International Organization for Standardization (ISO 27001)
The International Organization for Standardization collaborated with the International Electrotechnical Commission to create the ISO 27001 standard. It uses a risk management paradigm that spans people, procedures, and technologies to take a complete approach to keeping sensitive information secure.
Colocation facilities must first assess all of the information security threats they encounter in order to comply with ISO 27001. To mitigate these threats, businesses must then create and implement information security procedures. Finally, they must establish ongoing management processes that will allow security procedures to evolve in response to the ever-changing threat landscape. An approved certifying body can audit an organization when it has completed this process. The ISO 27001 certification assures financial services organizations that their sensitive data will be kept safe in a colocation facility.
Compliance with ISO 27001 requires physical security. To limit access to authorized users, colocation facilities require strong access control methods — for example, turnstile gates that only allow one entry at a time assist avoid the problem of unauthorized “tailgaters.” A single point of entry is also preferable for secure access, and continuous camera surveillance—with an approved video retention policy—is required. Even more security can be provided by onsite guards.
Another important aspect of ISO 27001 compliance is network security. The standard requires firewalls to protect against malware assaults, as well as data encryption, and a strong password policy that includes upper and lower case letters, digits, and special characters in passwords. Furthermore, passwords should be changed on a regular basis, and precautions against password recycling should be in place. The security of digital systems is also considerably enhanced by two-factor authentication.
Finally, the ISO standard emphasizes the importance of third-party vulnerability and penetration testing. Colocation facilities should strongly consider engaging an outside vendor to undertake a system break-in, allowing for the detection of dangers that would otherwise go undetected.
Payment Card Industry Data Security Standard (PCI DSS)
Because it only applies to firms that process credit card transactions, the Payment Card Industry Data Security Standard is more specific than ISO 21007. The purpose of this standard is to prevent credit card fraud. Financial institutions that deal with credit cards must be compliant, as some corporations, such as Visa and Mastercard, levy fines for noncompliance.
PCI DSS’s main purpose is to protect cardholder data so that customers may feel safe using their credit cards. Cardholder data must be encrypted when transferred over public or open networks, and while stored data should be encrypted as well, firms can achieve the highest level of security by avoiding storing data in the first place. The storing of the most sensitive authentication data, such as PINs and card validation codes, is really prohibited by the standard (the three digits on the back of a credit card).
The PCI DSS mandates that access to cardholder data be restricted to those employees who require it to do their jobs. The lesser the risk, the fewer persons who have access to sensitive data. To ensure security, PCI DSS, like ISO 27001, needs frequent testing of systems and procedures.
Federal Information Security Management Act (FISMA)
Congress established the Federal Information Security Management Act in 2002, and it was modified in 2014. It establishes security standards for federal agencies and contractors. Any colocation facility that holds government data or works with financial services organizations that do business with the government in any way is required to follow its guidelines.
FISMA mandates that government partners construct a security system strategy and review it on a regular basis, implement baseline security controls, and develop an inventory of information systems that categorizes them by risk category.
A Partner with a Lot of Potential
The financial services industry has been a pioneer in operational digitization in many respects. This is likely to continue in the next years, especially as finance-oriented artificial intelligence and blockchain tools become more practical, implying that the IT sector will be critical to the financial services industry’s long-term prosperity.
Colocation facilities will be in a great position to secure a lot of business from financial services businesses if they follow the three security requirements stated above. For colocation centers and aid for financial services see us at Rack59 Data Center.