The Financial Conduct Authority (FCA) has produced new guidance to enable banks and other financial institutions to make use of cloud computing.
The regulator says in the guidance that there is no real reason why cloud computing could not be used, including public cloud services, providing the service falls within the guidelines. The move has been described as “really positive” by technology law expert John Salmon; meanwhile, the FCA believes that the use of cloud services can help the financial services sector to improve competition and deliver benefits for both companies and consumers.
The FCA says there are a number of risks that should be managed when outsourcing such services; for example, companies need to be aware that they may not be able to tailor the services in exactly the way they want. They should also be aware that they do not have a great deal of control over where the data is stored and that some providers may be sub-contracting services without informing the user.
The guidance, which is currently in draft form, outlines a number of issues that financial organisations would need to consider, including data protection, security, and business continuity.
The FCA has made a number of recommendations for companies that want to consider cloud computing, including checking whether UK law covers their cloud contracts. Companies should also be sure that their auditors and the FCA have access to the data when required.