Materiality test among new bank guidelines on cloud services
Updated guide takes into account technological advancements and the evolution of market practices, says ABS
Singapore
THE Association of Banks in Singapore (ABS) has published updated guidelines for financial institutions (FIs) when they enter into cloud outsourcing arrangements. The guide contains best practice recommendations and considerations by the banks to support the safe adoption of the cloud.
ABS said the updated guide represents a "substantial revision" from its first publication in June 2016, as it takes into account technological advancements and the evolution of market practices.
These include key characteristics to guide the categorisation of material and non-material cloud outsourcing arrangements, guidance for due diligence assessment on cloud service providers (CSPs), and approaches for governing, designing, securing and running the cloud, ABS said.
In addition, the revised guide also specifies considerations for migrating various operations to the cloud, highlighting those that would call for more stringent requirements.
"Material" operations for instance, would require the highest level of security. These contain customer data, provide important services to customers, and are crucial for the day-to-day running of banks, an ABS spokesperson told The Business Times on Friday.
The ABS Cloud Computing Implementation Guide 2.0 is the result of 18 months of research, followed by a three-month cross industry consultation with CSPs, FIs and the Monetary Authority of Singapore (MAS), ABS added. Said ABS director Ong-Ang Ai Boon: "As one of the top financial hubs in the region, it is crucial that the financial industry seizes the cost and risk reduction opportunities offered by cloud computing services.
"The partnership with CSPs would also strengthen the technology and operational resilience of individual institutions as cloud infrastructure scales on demand to support fluctuating workloads."
Sopnendu Mohanty, MAS chief fintech officer, said: "Financial institutions are scaling up the utilisation of cloud services to enable innovation and new business models, as well as to meet the exponential need for and use of data.
"The updated implementation guide reflects clear industry good practices and recommendations in line with this shift. It will continue to facilitate responsible and secure adoption of cloud services by establishing clear expectations for both banks and cloud service providers."
