Organizations subscribing to third party software solutions need to understand the risks that come when outsourcing the application. The risk can be in the form of software outage or out of business, data could be lost leaving subscribers unable to carry their day to day operations or comply with its data obligations. Although this is relatively rare, it may cause irreparable reputational and financial damage.
Having a contingency plan to counter for the above risks is much needed for any organization outsourcing to a third party SaaS application. One way is to monitor the SaaS provider’s payments to its external cloud services with the help of a third party. Another scenario is the access to the data for the SaaS provider. i.e., a system should be in place to enable access to the data centre in which it is stored, independently of the SaaS vendor. With the financial sector relying on SaaS providers for the solutions, organization should consider how they will retrieve their data and services, if any unforeseen circumstances arise. Firms need to take a snapshot of the application in its runtime environment to restore in an efficient manner when the above risks appear.
Finally, financial firms need to check if the SaaS providers have the required operational expertise to meet legislation and other regulations which includes identifying risk to data continuously. Any contract between the financial firm and SaaS provider should outline how the provider make sure the data is secure and managed carefully.