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Day: March 23, 2023

Impact of New Framework by SEBI for Regulated Entities on AWS Cloud

Posted on by Abhijeet Chinchole

Cloud adoption has been pivotal for financial institutions that need data management. Organizations are spending more on cloud computing technologies nowadays. For example, Gartner predicts the spending on public cloud services to reach US$600 Bn by 2023. One of the significant costs for which organizations spend more is cloud security. Data regulations, like PCI-DSS and GDPR, ensure better data protection for financial transactions. Likewise, India has specific guidelines for regulated entities (REs) overseen by the Securities and Exchanges Board of India, or SEBI.

SEBI has introduced a framework for such REs to adopt cloud-based infrastructure and technologies. The main objective of the framework is to ensure all the critical risks of data leaks are identified and addressed while adopting cloud computing. So, compliance with SEBI guidelines is crucial if you are a regulated entity using a cloud service like AWS. This article will focus on the framework, the new set of guidelines released on 6th March 2023, and how to ensure you follow all the SEBI guidelines for REs on AWS.

Overview of SEBI Regulations

On November 9th, 2022, SEBI introduced a framework for regulated entities highlighting key risks and measures for information access while adopting cloud-based solutions. Regulated entities that need to comply with these SEBI guidelines are,

  • Stock exchanges and stockbroker companies
  • Clearing corporations and depositories
  • Asset management companies
  • Boards of trustees of mutual funds
  • Association of Mutual Funds in India (AMFI),
  • KYC Registration Agencies,
  • Qualified Registrars to an Issue

SEBI’s framework for cloud computing

According to this cloud framework, there are no limitations to the deployment model for businesses, and REs can adopt cloud computing based on their requirements. REs can choose to outsource the IT services with a cloud-based solution but need to be accountable for all the aspects, like,

  • Confidentiality
  • Data security,
  • Compliance with the SEBI guidelines
  • Access control,
  • Data privacy of users.

Cloud computing technologies allow financial institutions to manage massive data through servers, storage, networks, and software services. SEBI’s guidelines are designed to safeguard the information regulated entities store using cloud computing services.

Types of security threats and challenges regulated entities face

Regulated Entities face many security threats like malware, ransomware, social engineering, and more.

Phishing attacks

REs can face phishing attacks with attackers targeting internal employees through social engineering practices. These attackers gain access to sensitive data through access to internal employee credentials. Employees are tricked into clicking on some links received through email or other mediums to gain access to the credentials.

Malware

Malware attacks can be invasive and cause massive data leaks. Regulated entities can face such attacks due to remote code injections or access to backdoor vulnerabilities for attackers on the servers’ hosting data.

Ransomware

Such attacks happen due to specific user data being stolen by attackers through system vulnerabilities. Attackers ask for a ransom to release the data to users or organizations.

SQL injections

SQL injections can expose data and compromise the integrity of systems. It is a type of vulnerability that allows attackers to execute malicious SQL statements on your database, especially if user data is concatenated with the SQL commands. Attackers can gain access and execute attacks.

Other challenges that most REs face apart from the cybersecurity attacks are

  • Protection of intellectual property rights, licenses, or contracts of the data owners is a massive challenge in maintaining compliance.
  • Maintaining security across multiple architectures, platforms, programming languages, and different applications can be a challenge.
  • Coping with the ethical and legal conders of storing sensitive information.

Guidelines for Cloud Service Providers (CSPs)

SEBI has specific guidelines for CSPs that you need to keep in mind while choosing one for your business.

  • Conduct risk assessment and due diligence before selecting a cloud service provider (CSP).
  • Ensure all the data ownership terms are checked before entering into a service level agreement (SLA) with CSP.
  • Ensure that the CSP complies with the SEBI regulations in India and data regulations from other international regulatory standards like, HIPAA and PCI-DSS.
  • CSP has no adverse impact on the security, confidentiality, integrity, and availability of the data and systems of the Regulated Entities.
  • Need adequate access and control over data and systems hosted on the cloud.
  • Implement security measures such as encryption, authentication, firewall, and backups.
  • Monitor and audit the security of their AWS cloud services regularly and report incidents or breaches to SEBI within 24 hours.
  • Maintain all the records of cloud services and data transactions for at least five years.
  • Make all the records available to SEBI or other authorities.

Complying with the above guidelines is essential for your organization. This is why you must choose a CSP with enhanced cloud security features. Amazon Web Services, or AWS, comes with tons of features that ensure high-performance cloud computing and secure infrastructure. AWS can provide regulated entities with many advantages, including

  • Better scalability – features to adjust computing capacity as required without costly hardware or software requirements.
  • Enhanced security – has various layers for data and application security, including encryption, firewalls, access control, and compliance audits.
  • Cost efficiency – is higher because Regulated Entities need to pay only for the resources they use.

Nonetheless, AWS also presents some risks and challenges for regulated entities, such as:

  • AWS must meet the legal and regulatory requirements of SEBI guidelines.
  • Regulated Entities need to consider the impact of AWS services on data privacy and protection obligations.
  • Regulated entities may struggle to migrate their data and applications from AWS to another cloud provider.

Apart from the risks of vendor lock-in or legal concerns, regulated entities must consider the new set of guidelines released by SEBI on 6th March 2023.

SEBI’s New Framework of Cloud Adoption for Regulated Entities

SEBI’s guidelines for entities under its regulation utilizing cloud services, issued on March 06, 2023, comprise a set of regulations to ensure the security and compliance of data and systems hosted on cloud platforms. The guidelines encompass the following facets:

Data Storage, Data Protection Requisites, and Access Control Measures.

The guidelines mandate that all data concerning regulated entities (REs) should be domiciled and processed within the geographical confines of India. REs should have unfettered dominion and oversight over their data.

The guidelines further require REs to effectuate encryption, masking, anonymization, and other data protection techniques. Moreover, REs should practice rigorous access control policies and mechanisms to ensure higher security for data on cloud platforms.

Requisites for data backups and disaster recovery

The guidelines require REs to have a comprehensive data backup and disaster recovery blueprint for their cloud-based systems. Further, cloud service providers must have adequate backup and recovery capabilities. REs should be able to switch between different CSPs in case of interruption or failure.

Optimal practices for managing AWS privileges

The guidelines recommend REs abide by the principle of least privilege for granting permissions to AWS resources. Further, it emphasized using role-based access control (RBAC) to assign roles and responsibilities to different users and groups.

The new guidelines suggest using multi-factor authentication (MFA) for accessing AWS accounts with regular audits.

Leveraging Cloudlytics CSPM for Adherence to SEBI’s New Framework

Cloudlytics cloud security posture management (CSPM) is a solution that enables entities registered with SEBI to comply with guidelines for data storage, protection, and access control. It facilitates continuous security assessment improving compliance with SEBI’s new framework.

  • Implementing Cloudlytics CSPM helps regulated entities to encrypt data using AWS KMS and AWS S3.
  • It satisfies SEBI’s data protection requirements by enabling backup and disaster recovery using AWS Backup and AWS S3 Glacier.
  • AWS IAM and AWS Organizations help meet SEBI’s access control requirements.

Cloudlytics CSPM also provides real-time monitoring, analysis, and reporting on security risks across AWS accounts and resources. It meets SEBI’s reporting requirements by generating audit logs and reports using AWS CloudTrail and AWS Config. Cloudlytics CSPM adheres to the principle of least privilege and employs AWS Security Hub and AWS GuardDuty to manage AWS privileges in compliance with best practices.

Benefits of Cloudlytics CSPM for SEBI-registered Entities on AWS Cloud

  • Improve your security posture by persistently monitoring and remedying misconfigurations, vulnerabilities, and threats throughout your AWS resources and accounts.
  • Customization of RBAC policies and reports to your specifications will bolster efficacy.
  • Enhance your visibility and control with a centralized view of the cloud environment.
  • Optimize your cloud usage and minimize costs with granular and actionable insights 

Conclusion

Regulated entities operating on the AWS cloud must comply with SEBI guidelines to ensure improved security, governance, and performance. However, meeting these requirements presents various challenges. You can use Cloudlytics, an intelligent CSPM tool, to eliminate cybersecurity risks, automate compliance checks, generate reports, and send alerts for violations. Further, you can use such a tool to ensure data management and security. So, if you’re an AWS cloud-based regulated entity seeking to attain SEBI compliance with ease and confidence, reach out to us today for more information.

What is cloud security? How to improve security on the cloud?

Posted on by Abhijeet Chinchole

Cloud computing has become increasingly popular as more and more organizations turn to the cloud to store and manage their data and applications. A large portion of the world’s corporate data is stored in the cloud. However, with this increased reliance of the cloud comes an increased need for cloud security.

Cloud security is an umbrella term that covers the tools and processes used to protect data, systems, and networks in cloud computing environments. In this article, we’ll explore the varied types of cloud security and how to minimize the risk of a security incident.

Types of Cloud Security

Here are the different types of cloud security that organizations can implement to protect their data and applications on the cloud:

Intrusion Detection:

Intrusion Detection Systems (IDS) monitor and protect cloud-based resources and infrastructure. These systems can analyze network traffic, system logs, and other data sources to identify suspicious activity and alert administrators to potential security breaches. Once an intrusion is detected, it can then be blocked or reported to the appropriate authorities. IDS can also help organizations comply with regulatory requirements and industry standards for data security.

Identity and access management (IAM):

Out of 90% of data breach cases faced by financial institutions, more than 60% were cases of identity abuse. This data pinpoints the dire need for Identity and Access Management in the cloud networks to ensure that only authorized users can access sensitive data and systems.

IAM systems manage and secure access to cloud-based resources, such as servers, storage, and applications. They typically have tools and technologies for managing user identities and authentication, authorization, and access control policies. This includes creating and managing user accounts, defining and enforcing access controls, and monitoring and auditing user activity.

Email Security:

Email is often used as a vector for cyber-attacks, such as phishing, malware, and ransomware, which can compromise the security of an organization’s IT infrastructure and data. Email security protects organizations and their customers from these threats by providing a set of tools and technologies that can be used to secure email communications and data.

Data Loss Prevention:

The cloud has become an increasingly popular target for data breaches due to its vast storage of sensitive information. Data loss prevention (DLP) is a set of processes and technologies used to stop sensitive data from being leaked outside of an organization. Some common DLP techniques include data encryption, access control, and activity monitoring.

Best Practices for Improving Cloud Security

Choose a reliable provider

Not all providers adhere to the same standards; some may cut corners regarding security to save time or money. Do your research and choose a provider with a good security reputation. Ask other businesses in your industry which providers they use and why they trust them. Once you’ve narrowed down your options, find out what kinds of data encryption they offer, what authentication methods they use, and what physical security measures are in place to protect their data centers. Make sure you understand their policies before entrusting them with your data.

Enable two-factor authentication

2FA adds an extra layer of security by requiring users to provide two forms of authentication before accessing sensitive data or systems. The additional authentication factor can be something the user knows (such as a password) or something the user has (such as a security token or a mobile device). There are different ways to enable 2FA, such as using Security Tokens, SMS, or App-based authentication. It is important to ensure that the 2FA solution is easy to use and does not create an additional burden on users while providing the necessary security level.

Encrypting data in transit

As data is increasingly transmitted over public networks, the risk of interception and theft grows. Still, 51% of companies don’t use encryption to protect their data stored on the cloud. Encrypting data in transit can help protect it from eavesdroppers and attackers. This can be done using various encryption protocols such as SSL/TLS. Encrypting data in transit is essential not just for data privacy but also for compliance with regulations such as HIPAA, PCI-DSS, etc. Additionally, it is vital to regularly review and update encryption protocols and standards to ensure they are up-to-date and secure.

Secure your user endpoints

User endpoints are the weak link in any organization’s security posture. Endpoints are where users access company data and applications and are the most likely entry point for attackers. By securing user endpoints, organizations can prevent or mitigate these threats, protecting the company and its client’s data, and preserving the trust and reputation of the company. It involves implementing security measures such as firewalls, antivirus software, and endpoint encryption to protect these devices from malware and other cyber threats.

Providing adequate security training to employees

Employees are often the first line of defense against security threats, and ensuring that they are aware of security best practices and policies can help reduce the risk of data breaches and other security incidents. Providing adequate training to employees on identifying and responding to security threats, such as phishing attempts and other forms of social engineering, can help create a culture of security within the organization.

Use a Cloud Access Security Broker (CASB) solution

A CASB solution acts as a gatekeeper, monitoring and controlling access to the cloud resources and enforcing security policies to protect sensitive data and comply with regulatory requirements. CASB solutions can provide features such as threat protection, data loss prevention, and compliance reporting. Implementing a CASB can effectively improve cloud security by providing visibility and control over cloud usage and securing data in the cloud.

Cloud Security Challenges

There’s no surprise that cloud security issues are the top concern of enterprises. As the world increasingly moves to the cloud for its computing needs, it’s important to understand the security challenges inherent in this new environment. One of the main challenges is that the cloud is a shared environment, meaning that multiple organizations use the same infrastructure. This can lead to security breaches if one organization’s data is compromised.

Another challenge is that cloud providers are responsible for the security of their infrastructure, which means that they may have a different level of security than an on-premises environment. Additionally, cloud providers may have a different level of visibility into their networks than on-premises environments. This can make it more difficult to detect and respond to threats.

Finally, because the cloud is constantly changing, it can be difficult to keep up with security patches and updates. This can leave organizations vulnerable to attack if they’re not using the latest versions of software and security tools. To address these challenges, organizations need to take a proactive approach to security. They need to consider how they can segment their data and applications, and deploy security controls at multiple levels.

Managed Services for Cloud Security

Managed Services for Cloud Security provide businesses with a proactive and comprehensive approach to securing their cloud environments. These services include monitoring, managing, and maintaining cloud security infrastructure to ensure that your data and applications are protected from potential threats.

Cloudlytics, a managed cloud security service, provides a range of services, including continuous monitoring, incident response, and compliance management. It uses advanced analytics and machine learning algorithms to detect potential security threats, such as unauthorized access or data breaches, in real -ime. It also offers compliance management to ensure that your cloud environment complies with industry regulations such as PCI DSS, HIPAA, and SOC 2.

With the help of Cloudlytics Managed Service for Cloud Security, businesses can focus on their core operations without worrying about the security of their cloud environment. It gives peace of mind knowing that experts protect your data and applications and you always comply with industry regulations.

Conclusion

It’s important to note that cloud security is not a one-time event but rather an ongoing process of identifying and mitigating security risks and adapting to new threats and vulnerabilities. Organizations need to adopt a comprehensive cloud security strategy that includes a combination of technologies, processes, and controls to protect their data, applications, and infrastructure on the cloud.

Additionally, staying up to date with the latest security best practices and regulations and continuously monitoring and assessing the security posture of the cloud environment can help to mitigate the risks and address these challenges.

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