Cloud Security
The set of policies, technologies, and controls designed to protect data, applications, and infrastructure in cloud computing environments. With financial services increasingly adopting cloud solutions, cloud security is critical for DORA, ISO 27001, and GDPR compliance.
Cloud security addresses the unique challenges of protecting data and workloads in cloud environments, where the shared responsibility model distributes security obligations between the cloud provider and the customer. Understanding this division of responsibility is crucial for compliance.
For DORA compliance, cloud security takes on particular significance because cloud providers are typically classified as ICT third-party service providers. Financial entities must ensure their cloud arrangements include contractual provisions for security, audit rights, data location requirements (particularly relevant for EU data residency), incident notification, and exit strategies.
Key cloud security considerations include identity and access management in multi-cloud environments, data encryption at rest and in transit, network security and segmentation, configuration management and drift detection, security monitoring and logging, backup and disaster recovery, and compliance with data residency requirements. Organizations should also consider cloud concentration risk — the potential impact of a major cloud provider outage on financial stability.
Related Terms
Third-Party Risk Management
The process of identifying, assessing, and controlling risks arising from outsourcing to third-party service providers. Under DORA Article 28, financial entities must maintain a register of all ICT third-party providers and conduct thorough due diligence on critical providers.
Encryption
The process of converting data into a coded form that can only be read by authorized parties with the correct decryption key. Encryption protects data both at rest and in transit, and is a fundamental requirement across all major compliance frameworks.
Access Control
The selective restriction of access to resources, systems, and data based on user identity and authorization. Access control is a fundamental security control required by ISO 27001, SOC 2, DORA, and GDPR to ensure that only authorized personnel can access sensitive information.
DORA (Digital Operational Resilience Act)
An EU regulation that establishes uniform requirements for the security of network and information systems in the financial sector. DORA became mandatory on January 17, 2025, and applies to banks, insurance companies, investment firms, and their critical ICT service providers.
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