Balancing the risk of cloud concentration regulation with the innovation premium

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Regardless of size and business mix, most financial institutions have understood how to benefit from cloud and multi-cloud computing services. There are cost benefits when it comes to scaling, delivering new services, and innovating. There are security and resiliency benefits that can be difficult and expensive to replicate on-premises, especially for smaller institutions trying to keep up with rapidly changing standards. And there is geographic access to new markets – from China to Canada – that require the deployment of local, in-country systems under emerging sovereignty laws.

However, as the industry continues to adopt cloud services, regulators are becoming more aware of the challenges associated with cloud computing, particularly those that could expose financial institutions to systemic risks that potentially undermine the stability of the financial system. The Financial Stability Board (FSB) and the European Banking Authority have urged regulators worldwide to…



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