Many private banks and wealth managers are now in the cloud, in part at least.

This is an interesting move because we know that traditionally firms have prioritised client data security through in-house control. Wealth managers pride themselves on privacy and security when it comes to sensitive client data.

Putting data in the cloud goes against the grain!

But the case for using the cloud is compelling, to say the least.

A combination of business drivers such as Artificial Intelligence (AI), the 2020 pandemic, alongside regulatory clarity via FINMA and the availability of Swiss data centres has unlocked both the ability to transition to the cloud and the desirability of doing so.

Indeed, as technology increasingly becomes cloud-first, and the hardware needed to support technologies such as AI becomes more specialised, firms that don’t transition may be left behind.

Benefits of the cloud

The benefits of the cloud are well documented. With scalability and flexibility, wealth managers can adapt to changing needs quickly and cost-efficiently. Cloud also gives wealth managers real-time updates, API connections, and integrations with best-of-breed solution providers and the means to leverage AI capabilities.

However, concerns linger over data security.

This is something we understand at Wealth Dynamix. Having made the transition to the cloud successfully we fully appreciate the need to balance the benefits of the cloud with the absolute need for data security.

Why did we want to be in the cloud?

There were two generic reasons behind our cloud migration; control over cost of ownership as well as access to the many functional and technological capabilities provided by the cloud.

The big reason was data!

Our business is client lifecycle management. This is an area that has massively expanded scope-wise in recent years. Formally a just Rolodex type capability, CLM now means having a 360-degree holistic client view; from their first contact with a wealth manager, through the prospecting and onboarding stage, and onto their ongoing relationship with you.

Good CLM means knowing, at the touch of a button, about your client’s past, current, and future likely needs and situation. That means advisers can give a better level of service that is personalised and tailored to the client’s exact situation.

But this relies on gathering lots of sensitive data, and increasingly, data relies on the cloud. And wealth managers need to be able to rely on the cloud to keep that data safe and secure.

The good news is that you can hold your data in the cloud and enjoy all its benefits AND enjoy peace of mind when it comes to data security.

Here’s how we did it and some things for you to consider.

Business strategy

This comes first and is all around setting objectives and defining what a successful cloud migration looks like for your company. A list of cloud benefits and an attitude of ‘why would I not use the cloud’ will help identify and deal with any doubts or niggles.

Next, define and prioritise your outcomes. This will need some contextual information like your business structure, compliance set-up, any specific actions and activities like vendor management, the need for staff access and what service model you would like.

Also, use compliance to your advantage. Compliance is often seen as a burden when in fact it can be useful in shaping and guiding your data security strategy.

Understand your data

Firstly, you need to look at all your data and work out what data types you hold, in what state, and for what purpose.

Next, find out whether your data is clean and well organised and is, therefore, easy to categorise into that which is client identifying (CID) and that which is not. This acts as a base for securing and protecting your data.

Now, consider the journey of data. Where does data come into the organisation and what does its ongoing journey look like? How does it come together to a central place for reporting and other activities that require data aggregation?

Then, think about what data will be held in the cloud and the level of security that each type of data needs. A good governance and stewardship approach is one of ‘least privilege’ when you give access to as few people and systems as possible.

You can make ‘Privacy by Design’ your default and leverage encryption and zero trust for client-identifying data.

Local differences also need consideration where data from regional branches is to be consolidated, ensuring client terms and conditions and local regulations are considered.

Finally, you need to consider which data types will need to be encrypted as well as stored securely. This means all data that could potentially identify an individual. You also need to consider where encryption should take place, at the database level or where it is stored.

How encryption works

Anything that could be described as CID can be fed into a tokenisation engine and scrambled. This makes it meaningless but crucially the original format or sorting order can be kept so that when the data is unencrypted it is instantly accessible.

You can choose between database and in-transit encryption. IP locking then puts a wall of access permissions around the restricted data and locks access to the cloud service.

Look to bring your own keys (BYOK). If you own the keys to unlock encrypted data, then you can more easily control access. You can also look to minimise logins and hold keys that give access to different parts of an overall data set.

Having privileged access management then provides monitoring and instant alerts if someone is trying to access data. You can also lock access to specific locations or countries.

Ultimately, the goal is to make sure you can leverage all the advantages of the cloud as they relate to your strategy and needs. Data security is a key need and without it, the cloud does not make sense.

If you take a considered approach to your data and its security – understanding it, cleansing and classifying it, and labelling it with a clearly defined risk profile – then you will find that moving to the cloud and having secure data are not mutually exclusive.

The benefits of scale, cutting-edge technology, and functionality are vast and yours for the taking!