After recent data breaches, Jo Gibson, Operations Director at leading cloud-based payments bureau, First Capital Cashflow, explains the security benefits of using cloud services.

In the constantly evolving digital age, the cloud has been one of the key components to the rapid success of online payments and seamless transactions of money globally.

However, with high-profile data breaches at organisations including Talk Talk, Three Mobile and – not to forget – the NHS, have put cyber-security and payment fraud protection under the microscope.

Business owners are becoming increasingly concerned about how they can protect customers’ confidential data, especially if it contains financial information.

Research conducted by cloud specialist, Zero2Ten, has found that 60 per cent of people cited concerns about data security as a barrier to the adoption of cloud-based payment services. Adversely, independent research by Bottomline Technologies to ICAEW members highlighted a 33% year on year increase in cloud migration across the majority of companies. That said, this growth is mainly attributed to larger organisations and corporates.

So why are a large number of smaller businesses put off using cloud-based technology? Given the rise in cloud adoption by other larger organisations, are they, in fact, missing a trick? Or do they need more information about its advantages?

Securing data in the cloud

Cloud-based software provides comprehensive security benefits to all businesses. Despite outdated perceptions, cloud solutions incorporate a vast range of stringent security measures covering a variety of eventualities. In fact, they’re often more secure than paper or in-house software solutions, especially when it comes to avoiding breaches and preventing disasters.

One of the biggest advantages that cloud has to offer, is the ability to host information in an outsourced, offsite data centre. Data centres provide a cast iron level of security: the highest quality environment possible for data storage, with experts on hand to tackle any unwanted incidents.

Having sensitive information spread across several data centres adds further resilience against any potential violations that may occur. Disasters like power failures won’t impact on the safety of customers’ data. This means that hosting financial data in the cloud actually provides an extra layer of security, when compared with the potential threat of data being impacted by incidents that may arise at a company’s premises – such as burglary, fire, or unintentional human error.

Payment processing with the cloud

The real security benefits of cloud can also be seen when processing payments. In such cases, a business needs access to its customers’ financial information – arguably the most sensitive data of all. Using a Bacs-approved and FCA-accredited cloud-based service to process outbound Direct Credit and inbound Direct Debit payments, clients can be assured that it is highly secure and regulated.

Cloud-based payment technology is designed to seamlessly integrate with existing payment processing methods, offering the added advantage of time and money savings. Employing applications in the cloud is not only quicker to setup, but also allows for lower and more predictable costs. For example, it eliminates the need for in-house software and infrastructure; negating expensive upfront costs of software installations; and removing the need for on-going maintenance and software upgrade costs. This makes secure Direct Debit and Direct Credit processing more easily accessible to a wider range of businesses, giving them real-time connectivity to their financial information.

When processing payments using automated methods like Bacs Direct Debit and Direct Credit, the cloud is proven to provide comprehensive security and business benefits that are far superior to paper-based or in-house payment software solutions.

Always up to date

In a fast-moving digital environment, there is a need for companies to remain aligned with new industry initiatives and a rapidly changing payments landscape.  This is far less achievable with installed software.  The on-going cost of software upgrades can be a stretch too far for some businesses. Conversely, cloud-based processing technology not only helps businesses adhere to ever-changing payment regulations and legislation more easily, it also enables them to take advantage of innovative solutions and functionality that new initiatives (such as UK Open Banking for example) bring to market.

Cloud technology offers access to a host of security benefits that aren’t available with in-house technology – or which would most certainly come with a high price tag in up-grades. This includes things like; continual updates to technology, email hacking prevention and constantly updated antivirus software. Highly advanced cloud providers even appoint ethical hackers to regularly and meticulously test their systems with ‘penetration tests,’ constantly keeping them one step ahead of potential breaches.

Remote access

Another great benefit of the cloud is that it can be accessed anywhere at any time. With data stored in the cloud, business owners have the flexibility to gain access to information at their convenience.

This doesn’t just help the practicality of the working day; it means that actions can be taken fast if a security breach occurs. For example, if a laptop is lost or stolen, data can be accessed immediately from any location in the world and wiped to prevent it falling into the wrong hands. Further, if a burglary takes place at headquarters or even if a natural disaster occurs, financial data can be remotely accessed instantly, and the situation can be contained.

It’s well documented that missing laptops are often the source of data breaches, so an ability to remove data from these systems remotely is a major advantage of cloud payments technology and something that currently isn’t communicated to businesses and their customers.

Stalwart data centres

Another advantage of the cloud, and probably its biggest safety selling point, is the ability to host information in a secure, offsite data centre.

Hosting sensitive financial data in high-security data centre is one of the biggest security advantages and something security and IT professionals need to capitalise on. The UK has some data centre sites across the country, so leading cloud providers can store information across multiple locations, further reducing the risk of a hack or breach taking place.

Using the cloud and secure data centres, positions sensitive information away from company headquarters, mitigates against a range of disaster scenarios and further cements the argument that the cloud is the safest tool when it comes to protecting sensitive financial information.

We’re only human

Many SMEs look to technological failure as the one and only reason for the recent insecurity surrounding cloud. This key misconception has to be addressed. 

An analysis of over 450 cyber incidents the firm had handled, BakerHostetler’s 2017 Data Security Incident Response Report concluded that employee action or mistakes were the cause of 32% of all incidents, both security and fraud.  In reality, unintentional human error lies at the heart of the majority of breaches.

Cloud solutions also prevent intentional human intervention, resulting in potential payment fraud, by removing the risk of exploitation through data tampering and unauthorised user access. Staff can be provided with unique log in credentials – recreating a personal ‘bank account’ for every user.  Unlike paper or software-based solutions, cloud-based applications capture full audit trails of all user activity, giving greater visibility into who has accessed and viewed the secure data.

Data Encryption

With a cloud-based service from a leading provider – like those that handle financial data – delicate customer information can be encrypted, reducing the risk of any unwanted breaches.

Multiple layers of sophisticated encryption act as a barrier. So, in the unlikely event of a data breach, highly sensitive information is more likely to remain secure.

Indeed, these layers of encryption could be implemented for in-house software, but not without significant upfront costs to the business; something only larger organisations would be able to invest in.

Future-proof your business

As outlined above, there are many advantages for business owners to invest in cloud-based technology, including to process payments or any other related expenditure.

As long as businesses use a reputable and trustworthy provider, the cloud is one of the most secure methods of hosting and handling data. For 15 years now, First Capital Cashflow has been doing just that.

Cloud-based Direct Debit Management with First Capital Cashflow

First Capital Cashflow provides cloud-based Direct Debit services for small businesses, the public sector and charities across the UK. Our services make accessing Direct Debit as simple as possible and are recognised and audited by Bacs and the FCA, ensuring complete piece of mind for your business.

To find out more about our services you can contact our team for a free, no-obligation discussion on: 0344 8266 700 or request a call back.

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