Revolutionizing Risk Management with Cloud Technology
The Risks at Play
Technology RiskTechnology Risk can be associated with constantly evolving technologies and a lack of standardization in how they integrate or interoperate. Technology risks could lead to
costly re-architecture efforts for adoption or integration with new technology.
Operational Risk can be associated with the execution of IT services and tasks that the business relies upon. Cloud migration has also brought to the forefront a new approach called DevOps, where development and operations responsibilities are merging. This allows deployment times to be cut down to days rather than weeks or months. It can have an impact on IT operations, and development teams will need to be trained in cloud deployment and systems management in the cloud, although it will be less about managing IT hardware and networks.
Vendor Risk comes from leverage or association with vendors. Unforeseen vendor circumstances such as bankruptcy, lawsuits, SEC probe, or any other act of defamation for the vendor could significantly damage an organization’s reputation and goodwill. This risk would apply to the private external cloud and public cloud computing scenarios due to association with and reliance on the service provider(s). Due to the ease of access to IaaS (Infrastructure as a Service), there has been a mushrooming of innovative SaaS(Software as a service) start-ups—some with unique solutions that meet needs that the traditional vendors had left unaddressed. Some of these vendors might not be sustainable for large organizations looking to exchange increasing data while meeting stringent control requirements.
Financial Risk can be associated with overspending and loss of revenue. According to the North Bridge and Wikibon’s Future of Cloud Computing Survey in December 2015, the cost of cloud services is three times as likely to be a concern today versus five years ago.
Data Security & Regulatory Risk
Data Security and Regulatory Risk can be associated with loss, leakage, or unavailability of data. This can cause business interruption, loss of revenue, loss of reputation, or regulatory noncompliance. Regulatory risk is associated with noncompliance with various national/geographic regulations, industry, or services specific legal and regulatory requirements such as the Gramm-Leach-Bliley Act (GLBA), Sarbanes-Oxley Act (SOX), Health Insurance Portability and Accountability Act (HIPAA), or the European Union (EU) Data Protection Directive(GDPR).
On using AWS the above risks can be mitigated, want to know how? Read on.
How Cloud Technology Help Mitigate Risks
As evident in the discussed case studies, cloud platforms offer the immense transformative power of cloud computing in mitigating and managing risks across diverse industries. A few possibilities that are offered by Cloud are addressed further.
Scalability & Cost-Efficiency
Cloud-based risk management solutions provide scalability that is unparalleled in traditional on-premises systems. As data volumes grow, organizations can seamlessly scale their resources up or down based on demand. This elasticity ensures optimal performance and enhances cost-efficiency, allowing organizations to pay for the resources they consume and avoiding unnecessary infrastructure costs.
AWS's scalability is a game-changer for risk management, ensuring optimal performance during peak periods while optimizing costs during periods of lower activity. Amazon EC2 (Elastic Compute Cloud) allows organizations to scale computing resources seamlessly, adapting to the dynamic nature of risks.
AWS's serverless computing with AWS Lambda further enhances scalability, enabling risk management strategies to handle growing data volumes and increasing complexity effectively. This scalability is in line with the insights shared in "Scale Business: Move to Open Source Databases from Oracle or MS SQL," illustrating how AWS facilitates the scalability required for robust risk management.
Collaborative Possibilities in Risk Management
Cloud computing fosters collaboration among risk management stakeholders. Professionals can collaborate in real-time, irrespective of geographical location. Cloud-based platforms provide a unified environment for sharing insights, collaborating on risk models, and collectively making informed decisions, enhancing overall risk management effectiveness.
AWS's collaborative possibilities are transformative for risk management teams, enabling stakeholders to collaborate in real time. AWS provides tools like Amazon Quicksight for data visualization, fostering collaborative analysis and decision-making.
Drawing inspiration from "Utilizing a Workshop-Centric Method to Establish a Data-Driven Culture," AWS's cloud-based collaboration extends beyond risk professionals, involving diverse teams. AWS S3 and Amazon RDS (Relational Database Service) ensure secure and efficient data sharing, fostering a culture of collaboration that enhances the collective intelligence applied to risk assessment.
Security and Compliance Considerations
While the benefits of cloud-based risk management are vast, addressing security and compliance considerations is paramount. Cloud service providers offer robust security measures, including encryption, access controls, and compliance certifications. Organizations must work closely with their cloud providers to ensure a secure and compliant risk management environment.
AWS places security and compliance at the forefront of its services, offering a shared responsibility model that collaborates with organizations to build robust security measures. With services like AWS Key Management Service (KMS) and AWS Identity and Access Management (IAM), organizations can enforce strict access controls and encryption, ensuring the confidentiality and integrity of their risk data.
Furthermore, AWS's compliance certifications, as emphasized in "The Impact of Data Security Breaches on Company Value," contribute to the overall resilience of risk management strategies, instilling confidence in stakeholders regarding the security of their sensitive information.
In conclusion, cloud computing is a transformative force in risk management, offering unprecedented capabilities in data analysis, modelling, real-time monitoring, scalability, cost-efficiency, and collaboration. As CIOs, CTOs, CDOs, and data professionals embrace cloud technology, they pave the way for a new era of risk management strategies that are agile, data-driven, and resilient in the face of evolving risks. The journey to harnessing the full potential of cloud-based risk management begins now, ensuring a future where organizations not only survive but thrive in an unpredictable business landscape.
Want to know more about how Cloud Computing can Transform Risk Management? Reach out to us now!