Recently, FINRA’s office of financial innovation issued a report and requested comments on the regulatory implications of cloud computing. The cloud is a technology that’s increasingly being adopted by all industries for reasons like scaling operations, business continuity, and launching products.
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According to the report, market participants included experiences of broker-dealers, cloud service providers, industry analysts, and technology consultants. It focused on a number of things including:
SaaS Products
Firms migrated to the cloud in order to use off-the-shelf SaaS products with conclusions that purchasing instead of building applications was more quick.
Targeted, Incremental and Iterative Rollouts
Firms launched migration to the cloud in seperate steps and a lot of the firms began with pilot projects to test the use case before the big launches. This is where FINRA noted that firms chose to begin data migration by sending less sensitive data into the cloud.
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Governance and Cloud Security Protocols
Firms emphasized on the importance of spending their “significant resources” in the development of governance and cloud security policies.
Organizational Changes
In an effort to speed time-to-market, firms used migration as an opportunity to better integrate their software development with their operations.
Highlights From the Report by FINRA
In the report, FINRA pointed out the regulatory implications of cloud computing. Here’s how:
(i) Cybersecurity management
(ii) Data privacy for protection of customer records and information
(iii) Outsourcing to and relationship management of a service cloud provider
(iv) Business continuity pursuant to FINRA Rule 4370
(v) Record-keeping of cloud products or services
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