Quick Answer
The answer is AWS CloudHSM, as it is the only AWS service that provides dedicated hardware security modules certified to FIPS 140-2 Level 3 for managing your own encryption keys. This certification ensures tamper-resistant, single-tenant HSMs that meet strict government and compliance standards, allowing you to encrypt S3 objects using server-side encryption with customer-provided keys (SSE-C) or client-side encryption where the HSM handles key generation and storage. On the AWS Certified Security Specialty SCS-C02 exam, this question tests your ability to distinguish between key management services: AWS KMS is FIPS 140-2 Level 2 overall (with some regional Level 3 exceptions, but not guaranteed), while CloudHSM is explicitly Level 3. A common trap is assuming KMS meets Level 3 requirements across the board, but the exam emphasizes that CloudHSM is the correct choice when the compliance mandate specifies Level 3. Remember the mnemonic: "CloudHSM for Level 3, KMS for Level 2" — if the requirement says "dedicated HSM" and "Level 3," think CloudHSM first.
This SCS-C02 practice question tests your understanding of data protection. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company has a compliance requirement to encrypt all data in Amazon S3 using keys that are managed by the company's internal security team. The keys must be stored in a hardware security module (HSM) that is FIPS 140-2 Level 3 certified. Which AWS service should be used?
AWS Secrets Manager
Why wrong: Secrets Manager does not use HSMs.
AWS Key Management Service (KMS)
Why wrong: KMS uses shared HSMs, not dedicated Level 3.
Amazon S3 default encryption with SSE-C
Why wrong: SSE-C uses customer-provided keys, but not stored in AWS HSM.
AWS CloudHSM
CloudHSM provides dedicated HSMs with Level 3 certification.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
AWS CloudHSM
Option B is correct because CloudHSM provides dedicated HSMs that are FIPS 140-2 Level 3 certified. Option A is wrong because KMS is Level 2 overall (though some regions have Level 3, but not fully). Option C is wrong because S3 does not provide HSM storage. Option D is wrong because Secrets Manager does not store keys in HSMs.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
AWS Secrets Manager
Why it's wrong here
Secrets Manager does not use HSMs.
AWS Key Management Service (KMS)
Why it's wrong here
KMS uses shared HSMs, not dedicated Level 3.
Amazon S3 default encryption with SSE-C
Why it's wrong here
SSE-C uses customer-provided keys, but not stored in AWS HSM.
AWS CloudHSM
Why this is correct
CloudHSM provides dedicated HSMs with Level 3 certification.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
What to study next
Identify which SCS-C02 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Data Protection — study guide chapter
Learn the concepts, then practise the questions
Data Protection practice questions
Targeted practice on this topic area only
All SCS-C02 questions
1,738 questions across all exam domains
AWS Certified Security Specialty SCS-C02 study guide
Full concept coverage aligned to exam objectives
SCS-C02 practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Practise SCS-C02 questions linked to Threat Detection and Incident Response.
Practise SCS-C02 questions linked to Security Logging and Monitoring.
Practise SCS-C02 questions linked to Identity and Access Management.
Practise SCS-C02 questions linked to Management and Security Governance.
Practise SCS-C02 questions linked to Infrastructure Security.
Practise SCS-C02 questions linked to Data Protection.
Practise SCS-C02 questions linked to SCS-C02 fundamentals.
Practise SCS-C02 questions linked to SCS-C02 scenario.
Practise SCS-C02 questions linked to SCS-C02 troubleshooting.
Practice this exam
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
FAQ
Data Protection — This question tests Data Protection — Read the scenario before looking for a memorised answer..
The correct answer is: AWS CloudHSM — Option B is correct because CloudHSM provides dedicated HSMs that are FIPS 140-2 Level 3 certified. Option A is wrong because KMS is Level 2 overall (though some regions have Level 3, but not fully). Option C is wrong because S3 does not provide HSM storage. Option D is wrong because Secrets Manager does not store keys in HSMs.
Identify which SCS-C02 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Keep practising
Last reviewed: Jun 20, 2026
This SCS-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the SCS-C02 exam.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.