EBF Cloud Banking Forum releases three technical papers

EBF Cloud Banking Forum releases three technical papers
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BRUSSELS, 9 June 2020 – As cloud adoption by European Banks is key to the success of digital finance and innovation, the need for supervisory coordination and implementation becomes more evident. Through the Cloud Banking Forum, a cross-industry platform launched in 2017, EBF has published three technical papers providing legal and technical intelligence to National Competent Authorities of EU member states. The publications continue to build on the purpose and work of the EBF Cloud Banking Forum that brings together banks, cloud service providers, supervisors and policymakers to foster harmonised supervision of cloud services in the banking sector. All content has been drafted in the past year and reflects only a certain period of time. Data and methodology will be updated in the future as the market and policy cycles develop.

Says Alexandra Maniati, Head of Digital, European Banking Federation:

“Understanding the risks of cloud computing is essential to unlock its potential. European banks use technology widely to maintain resilience, boost innovation and support their clients, especially at times when digital infrastructure is necessary to respond to high usage at all levelels. The Cloud Banking Forum is a unique example of cross-industry cooperation that reflects the ambitions of the digital strategy of EBF and our wider banking community.”
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More information on the cloud at EBF and the Cloud Banking Forum are available at the EBF Cloud Banking page
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1. The use of Cloud

The first paper aims to give better insight and understanding of cloud use by financial institutions, describing the different cloud service models that banks can deploy and the corresponding benefits on operations, performance, and cost structures. In addition, banks’ important risk awareness involved is further outlined, complimented with particular considerations for European supervisors, while elaborating on the steps towards a harmonised supervisory framework for stronger cloud adoption in Europe. It becomes clear that cloud computing is a key driver of a reliable data economy and service delivery, as it can connect banks with other financial institutions, customers and FinTech innovators seamlessly. This potential is shown through several use cases including Internet-of-Things and online collaboration. Download Paper
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2. Cloud exit strategy – testing of exit plans

Continuity and quality are core features of financial institutions’ cloud-based services to clients. Both European banks and cloud service providers commit themselves to protecting this continuity and quality against detriment, including potential manifestations in case of an exit from a cloud arrangement. This paper emphasises the importance of exit plan testing, following the EBA Guidelines on Outsourcing requirement to secure sufficient testing. This paper offers a common understanding of banks and Cloud Service Providers on what such sufficient testing could possibly imply, looking for important harmonization across European jurisdictions. To that end, it looks at the questions: When is testing appropriate? What may constitute sufficient testing of exit plans? The content of this paper puts forward voluntary guidance while listing different exit plan testing methods.  This can support financial institutions’ preparation for the eventuality of exiting cloud arrangements, thereby avoiding undue disruption to business activities. Download Paper
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3. Cloud Outsourcing Register

Under the EBA’s Outsourcing Guidelines, applicable since September 2019, banks should maintain an updated register of information on all qualifying outsourcing arrangements as part of their risk management framework. This document contains additional guidance on how each of the requirements of the Outsourcing Guidelines might be approached by banks on cloud-specific issues, taking into account the particularities of cloud outsourcing and its various deployment models. Mock cases for different cloud services seek to present guidance’s application in common scenarios. Download Paper
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For more information about the EBF Cloud Banking Forum:

Julian Schmücker, Senior Policy Adviser Digital Innovation, j.schmucker@ebf.eu