Financial firms issued with new cloud computing guidance
The march of cloud computing into UK businesses is continuing to gather pace, with financial companies now being given permission to use it by the industry regulator.
The Financial Conduct Authority (FCA) has now given financial businesses the green light to use the cloud for storing data, but has also introduced a number of provisos to ensure they do not fall foul of the regulations.
In its finalised guidance to firms outsourcing to the cloud, the FSA says financial businesses adopting cloud computing should do so with “appropriate considerations, in a manner that complies with our rules”. However, these are guidelines not regulations, although the watchdog says it does expect businesses to take its views into account when outsourcing their cloud provision.
Businesses looking to put their cloud provision in other countries are being encouraged to use jurisdictions that are not rogue states or tax havens.
The FSA said: "Considerations should include the wider political and security stability of the jurisdiction; the law in force in the jurisdiction in question (including data protection); and the international obligations of the jurisdiction. This should include consideration of the law enforcement provisions within a jurisdiction."
In reality, this does give businesses a choice of places where their information can be stored, OutLaw said.
Yvonne Dunn of lawyers Pinsent Masons said: "This is a positive development and is more in line with the reality of engaging with cloud service providers. Arguably the FCA is retaining the principles behind 'choice and control', but front-loading them so that the jurisdictions list can be assessed by the financial services firm and agreed up-front. The cloud service provider is then free to move data around that pre-agreed list, which provides the flexibility needed."
Businesses looking to move services into the cloud, should evaluate the performance of their existing network and consider setting up a leased line or MPLS network.
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