According to an amendment to the Circular on the Proper Conduct of Banking Transactions Regarding Cloud Computing, Israeli banking companies are now permitted to use cloud computing in their core systems and core activities. Until recently, this use of “core systems” was specifically prohibited by the Circular. As the Supervisor of Banks clarified, this change in approach stems from the recognition that cloud computing services promote and enhance the organization’s computing capabilities as well as the organization’s efficiency.
The amended Circular has been amended to include the term “material cloud computing” – defined as cloud computing used by banking entities in their core activities as part of their regular business operations – and a number of new related provisions. Among other things, the amended circular states that banking entities must conduct due diligence on providers of essential cloud computing services to ensure they comply with applicable laws and…