Are you thinking about storing financial documents in the cloud? Here are some issues to consider.
Cloud storage--using Internet-based service providers to store digital assets such as books, music, videos, photos, and even important documents including financial statements and contracts, has become increasingly popular in recent years. But is it right for you?
Opinions vary on whether to store your most sensitive information in the cloud. While some experts say you should physically store items you're not willing to lose or expose publicly, others contend that high-security cloud options are available as an alternative or additional storage method, and have the added benefit of preserving the records in the event of a natural disaster at your home.
If you're thinking about cloud storage for your financial documents, consider the following:
- Evaluate the provider's reputation. Is the service well known, well tested, and well-reviewed by information security experts? You would do well to look into reviews posted on the internet for each provider you consider.
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Consider the provider's own security and redundancy procedures. Look for such features as two-factor authentication and complex password requirements. It is beneficial for the provider to maintain copies of your data on servers at multiple geographic locations, so that a disaster in one area won't result in an irretrievable loss of data.
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Before signing up for the service, don’t just click “accept and agree” – you should actually review the provider's service agreement and terms and conditions. Make sure you understand how your data will be protected and what recourse you have in the event of a breach or loss. Also understand what happens when you delete a file--will it be completely removed from all servers? In the event a government subpoena is issued, must the service provider hand over the data?
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Consider encryption processes, which prevent access to your data without your personal password (including access by people who work for the service provider). Will you be using a browser or app that provides for data encryption during transfer? And once your data is stored on the cloud servers, will it continue to be encrypted?
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Make sure you have a complex system for creating and remembering passwords. Also, beware of continuing to use internet browsers and operating systems that become so old that they are no longer receive adequate security support. While that old laptop might still be operable, using it may pose significant risk of viruses and malware.
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Use the system regularly, so that you stay in the habit. You might upload all of your financial documents to the cloud in one big document-housekeeping binge, and then not use the system for a year. You may have difficulty remembering the process at that point, and the service provider may terminated your account for inactivity – some agreement terms provide for termination after 180 days with no activity! It’s best to continually use the system each time you find a financial document that should be uploaded to the cloud. Also, let a spouse or family member know the system and process, or at least that you have documents stored with a particular provider, in case something happens to you.
Source: ©2016 Broadridge Investor Communication Solutions, Inc. This material provided by Jennifer N. Weidner, Esq.