Financial institutions (FIs) looking to securely store data amid rising cybersecurity threats and open banking regulations can look to confidential computing, a technology that encrypts sensitive cloud-based data while it’s being processed. 

Confidential computing is a fairly new technology that performs computations in a hardware-based, trusted execution environment (TEE), according to tech giant Intel Corporation.

Google, for one, has built virtual machines (VMs) that leverage confidential computing technology, Anil Rao, vice president and general manager of systems architecture and engineering at Intel, said during a roundtable discussion hosted by Google Cloud last week.  

Google VMs use hardware with high-level encryption capabilities to prevent data breaches or regulatory fines in the banking industry by encrypting data while it’s being processed in a TEE, according to the Google Cloud website. 

“Confidential computing is an emerging technology paradigm and an ecosystem of solutions that’s focused on helping to secure particular data in use,” Rao said. “It is doing so without exposing the actual data to the rest of the system, making it especially beneficial for regulated industries like critical infrastructure, health care, government and financial services that generally process sensitive data or workloads.”  

Thwarting data breaches 

Banks can employ confidential computing through VMs to encrypt sensitive information — such as Social Security or account numbers and routing information — when an employee is accessing customer accounts, Rao added. 

For example, a data breach at payment platform Zelle in July 2021 saw an estimated $440 million swiped from users via fraud and scams, according to published reports. Data breaches jumped 62% year over year from 2021 to 2022 and cost FIs an average of $5.7 million to resolve, according to IBM. 

Banks that integrate confidential computing may encounter fewer compliance issues, given that businesses are open to moving their extremely sensitive data to another environment, Vint Cerf, chief internet evangelist at Google Cloud, said during the roundtable. 

“[Confidential computing] is actually a fairly straightforward concept, and one which is explainable,” Cerf said. “The value of it is equally powerful in the long term, that the regulatory structures will become an important inducement to adopting this capability because it will be recognized as a consistent way of protecting confidential software and confidential information.” 

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