Read This Before Storing Financial Information Online
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.
If you are thinking of storing your personal financial documents on the internet, there are several things you should consider first.
"Make sure you understand how your data will be protected and what recourse you have in the event of a breach or loss."
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.
Before storing information in the cloud
If you're thinking about cloud storage for your financial documents, consider the following steps and questions:
1. Evaluate the provider's reputation. Is the service well known, well tested, and well reviewed by information security experts?
2. Consider the provider's own security and redundancy procedures. Look for such features as two-factor authentication and complex password requirements. Does it have 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?
3. 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?
4. 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?
"Never share your passwords with anyone..."
Finally, no matter what service provider you choose, make sure you have a complex system for creating passwords and never share your passwords with anyone.