The Association for Financial Markets in Europe (AFME), in collaboration with Protiviti, has published a report displaying key regulatory barriers to the adoption of cloud services in capital markets.
The report, titled Building Resilience in the Cloud, found that while banks are increasing migration to the cloud, two solutions favoured by policymakers - portability and multi-cloud strategies - are likely to introduce further barriers to adoption.
These proposed recommendations from policymakers around portability and multi-cloud strategies present significant challenges to banks when adopting a risk-based approach.
According to the report, this can limit the benefits of cloud services and increase the technical complexity to support multiple Cloud Service Providers (CSPs).
AFME and Protiviti suggest ensuring regional and global alignment on cloud resilience and risk expectations and enhancing information sharing and transparency requirements for CSPs to address these challenges.
The report also highlights the importance of promoting increased comparison amongst CSP service offerings and encouraging cloud cross-border data flows and storage.
James Kemp, managing director, AFME, says: “Banks are adopting cloud for a wide range of benefits, including greater business agility, innovation opportunities, and the ability to increase their security and resilience. We have seen through the pandemic that cloud services have been fundamental to enable remote working and provide access to core IT and business services.”
He adds: “However, emerging policy in the EU and globally is in danger of mandating how banks adopt cloud because of the perceived risks for security, the concentration of providers, and resilience of the sector overall.
“While the solutions being discussed, such as ensuring portability or the use of multi-cloud strategies, can provide resiliency benefits, they risk introducing significant limitations and complexity which would lead to reduced cloud adoption overall.”
