APRA assesses offshore cloud services operational risks
David Pegrem, the head of IT risk at the Australian Prudential and Regulatory Authority, takes a harder stance on cloud computing than Australian bankers are used to. February 22, 2011 | Arush ChopraBanks across the Asia Pacific region have been such large adaptors of cloud computing that vendors regularly cite financial services as their biggest single industry, followed quickly by government. But the relatively new technology is not fully understood, and banks are still weighing the operational and IT risks inherent in the technology against the cost savings and efficiencies it can bring, while regulators are also struggling to define their stance on the risk side of the equation. Here Australia’s bank regulator the Australian Prudential Regulatory Authority (APRA) has taken the lead in tightening scrutiny over what banks are doing in this area. David Pegrem, the head of IT risk at APRA, in November 2010 wrote an open letter to banks and other deposit-taking institutions in Australia asking them to consult with APRA before entering into any offshore cloud services contracts. “Our letter was a reminder to ensure that little pockets of services being offered to various divisions that have mushroomed at institutions lately are subjected to strict governance and enterprise control,” Pegrem told The Asian Banker. APRA’s new line on cloud computing now appears to be quite different from the one that Australian bankers used to hold that regulators tend to be okay with cloud computing in their banks, but bankers are usually too concerned about the consequences to ask them about implementing these services; it now appears to be the other way around. Although cloud computing has yet to take off in a big way at Australian banks, apart from areas such as instant messaging, workflow management and Customer Relationship Management (CRM), Pegrem feels that these areas, in many cases, form an integral part of an institution’s core business processes. Australian institutions do not always recognise the s... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Channels, Operational Risk & Security, Retail Banking, Risk and Regulation, Technology & OperationsChannels,OperationalRiskSecurity,retail,Risk and Regulation,technology, Channels,Operational Risk & Security,Retail Banking,Risk and Regulation,Technology & Operations, Keywords:APRA, Australia, Cloud Computing, David Pegrem APRA, Australia, Cloud Computing, David Pegrem
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