Cyberattacks in the last 18 to 24 months have taken a decidedlymore global turn. No longer the shadowy work of lone hackersoperating out of a dark basement, today's largest, mostconcentrated attacks appear to originate from – and target –sovereign nations, and are aimed at crucial services as well asfinancial institutions. Because these more sophisticated attacksare aimed at online and mobile banking applications, yourorganization must continue to incorporate innovative solutions. Ifthe hackers have evolved and grown more complex, so, too, must yourcyber defenses. With today's consumers hyper-alert to security breaches with every headline,can you afford to put your brand at risk? While the “too large tofail” financial institutions can weather a digital attack, smaller,local credit unions could be wiped out by a large cybersecuritybreach. And since today, a member's mobile phone could be seen as asofter attack vector than an institutional system, it is moreimportant than ever for credit unions to keep their members safethrough all their touchpoints.

For the past decade, increasing security defenses meantadding more layers to an organization's core system, increasing thebulk and complexity of IT infrastructure, almost to the point whereeven IT staff couldn't get in. Add to that the time-consumingprocess of securing required approvals and signoffs to add newequipment, and it may be months before a new layer of securitycould be deployed, and that could be too late.

But security doesn't have to be a bad word, nor does it have tobe anathema to growth and innovation. It is possible tosuccessfully navigate today's cybersecurity waters and innovate atthe same time.

Nothing's Stronger Than … a Cloud?

Financial institutions have the opportunity today to innovateand implement efficient operations with modern digital experiences,and to increase their cybersecurity while doing so. Today'ssystems, built to be digital from the ground up and maximize thecloud, offer a solution for smaller, more nimble credit unionslooking to leapfrog the “big guys” in their markets, offer newproducts and services, and reach new audiences.

“But wait!” you say, “the big guys are set in their ways,they're not playing with this fancy new tech just because it'sthere, right?” Cloud technology is neither new nor untested. Bigbanks have been working foryears with cloud-based systems, rolling out applications a fewat a time, testing to see what works. Dedicated cloud use for heavyworkloads makes sense – sharing the load by shifting jobs to thecloud saves your own machinery from being overworked. The cloud hasbecome a maturetechnology, but credit unions and banks locked in the grip oflegacy core systems wouldn't know it. If the largest financialinstitutions are only able to test a few cloud applications at atime because they're locked into old systems, innovative, smallerplayers that are able to capitalize on new technologies much morequickly can gain an advantage.

Cybersecurity in the Cloud: What's theAdvantage?

The very nature of the cloud – both its distributed,decentralized data processing and storage, and the fact that cloudproviders serve multiple customers who demand up-to-the-secondtechnological advances – means it is more secure than a dedicated,onsite data center. Consider the impact if a flood or fire struckeven a satellite branch of a credit union. Localized events candestroy localized data. But when the various bits and bytes arespread out over large geographic areas, an event in one locationhas much less impact on the whole. By adding cloud-based technologyto your existing infrastructure, or moving over entirely, disasterrecovery from a localized incident is much faster, since the brainsof your system still operate offsite.

Cloud providers like AWS or QTS Data Centers havemulti-layer security infrastructures in place, including impressivemilitary-grade physical barriers to entry. Many small financialinstitutions consider a locked door to the IT server room to besufficient. Attackers know that smaller targets have fewerbarriers: According to a 2015 study, malware was present in 36% ofonsite systems, versus only 4% of cloud service providers. Cloudproviders specialize in monitoring their systems second by secondand can head off attacks almost before they begin. Traditional ITenvironments have a small number of administrators with fullcontrol. Cloud computing relies on diversified infrastructurecontrol, increasing the complexity to ensure network security.

Can You Afford Not to Move?

Just 10 years ago, baby boomers were the big demographic prizefor all markets. Financial institutions developed and grew bycatering to the needs of that generation. Now, of course,millennials are the largest market this country has ever seen, andthey have radically different expectations of the services theydemand. Key among those are mobile and online banking experiencesthat are safe and secure, that move with them no matter how theywant to interact, and that are much more personalized than theirparents' generation. While mom and dad, and especially grandma andgrandpa, will walk into a branch office to do their banking, themillennials who comprise your future member base want to pull outtheir phones, message payments to each other, sign loans on atablet and get text alerts when even the slightest problemoccurs.

Legacy core systems that can't comply with the demands oftoday's and tomorrow's members will need to be scuttled. Addingmore layers is a slow, costly and painful process. Financialinstitutions that do not take the 10- or 20-year view of theirmembers and their needs run the risk of going the way of Kodak. When converting to new, agile, cloud-based and open APIcore systems that increase security and make it simple to add innew product offerings, one must ask if they can really affordnot to make the move?

Drew Dizon is SVP, Strategic Partnerships& Digital Delivery at NYMBUS. He can be contactedat 619-985-5164 or [email protected].