In today’s digital-first world, marketers at banks rely on various third-party tools and services to execute campaigns, analyze data, and optimize customer experiences. Many of these services operate in their own public cloud environments which offers advanced capabilities and convenience. However, risk and security teams within banks are pressuring marketers to use their company’s private cloud instance instead.
This is because security, compliance, and data governance have become more critical than ever in the highly regulated banking industry. Additionally, another issue has surfaced—data matching and entity resolution challenges that impact both risk teams and marketing operations.
By keeping marketing, customer, and business data inside their own cloud environments this allows banks to not only reduce risk but also increases data ownership, improve match rates, and ensure long-term compliance—a critical advantage in an era of growing regulatory scrutiny and AI-driven threats.
1. Data Security and Privacy Protection
When marketers at banks use third-party tools hosted on external cloud infrastructure, they transfer sensitive customer data outside of the bank’s-controlled environment. This increases risks to the bank such as data breaches, unauthorized access, and regulatory violations.
A private cloud instance enforces that all data remains within the bank’s security perimeter which mitigates risk by reducing vulnerabilities and enabling tighter access controls. This is relevant given increases in cyber threats targeting financial institutions, where third-party cloud environments are often exploited as weak points.
2. Compliance with Banking Regulations
The banking industry is subject to some of the most restrictive regulations concerning data privacy and security, including the following:
- GDPR (General Data Protection Regulation)
- CCPA (California Consumer Privacy Act)
- GLBA (Gramm-Leach-Bliley Act)
- PCI DSS (Payment Card Industry Data Security Standard)
Third-party marketing tools and data platforms may not prioritize these compliance requirements, especially if they store or process data in jurisdictions with weaker privacy protections.
By consolidating data and computing inside the bank’s private cloud, banks can maintain full control over compliance, ensuring that all data governance policies, retention rules, and risk mitigation strategies remain in effect.
With the Consumer Financial Protection Act Section 1033 regulations on the horizon, they will require banks to provide additional transparency and accessibility for customer data which will make private cloud strategies even more critical.
3. Greater Control Over Data Governance
Banks generate and manage vast amounts of customer and financial data. When this data is stored in third-party cloud environments, they lose visibility and control over:
- Who accesses the data
- How the data is shared or processed
- Whether the data is altered or deleted without proper governance
A private cloud instance allows banks to own and govern their data, ensuring:
- Better enforcement of retention policies
- Auditability for regulatory reporting
- Stronger monitoring of data access and modifications
This approach means that both risk teams and marketing leaders can align on security while still enabling data-driven decision-making.
4. Solving the Data Matching & Entity Resolution Problem
A key issue in financial services is low match rates when associating business records across different datasets. Banks struggle to connect subsidiaries, DBA (Doing Business As) names, and merchant records to the right industry descriptions and source data.
The traditional approach has been for banks to outsource matching to external referential databases, which often helps fix entity resolution issues but requires sending sensitive business and customer data outside the bank’s firewall which introduces new security and compliance risks.
A better approach to this issue is bring data processing and computing inside the private cloud. This allows banks to:
- Improve match rates for business entities, ensuring greater accuracy in marketing and risk analysis.
- Keep sensitive data in-house, reducing reliance on third-party services for entity resolution.
- Enable marketing teams to move faster without security concerns delaying decision-making.
For banks investing in various areas such as AI-driven customer segmentation, fraud prevention, and risk modeling shows that data accuracy and entity resolution are critical to success. A private cloud approach results in high-quality data that is available without compromising security.
Conclusion: Why Banks Need to Act Now
While third-party marketing tools and public cloud environments offer convenience and cutting-edge capabilities, they introduce significant risks in security, compliance, and governance.
Risk teams are increasingly advocating for bringing data processing inside the bank’s private cloud because it:
- Improves data security & compliance
- Reduces unnecessary third-party risk
- Enhances data governance
By aligning risk, marketing, and business banking teams under a single secure cloud strategy, banks can unlock the full potential of their data—without introducing compliance risks or operational inefficiencies.
For banks looking to modernize their approach, the time to act is now. The institutions that make this shift today will set the standard for data security, AI-driven decision-making, and regulatory compliance in the years ahead.