Governance, risk & compliance 66% Harvard Business Review
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In Europe, the response to the difficulties of cloud transition has been the formation of the European Cloud User Coalition (ECUC) by 19 banks, among them UniCredit and ING, along with Allied Irish Banks, Erste Group Bank and Swedbank, to name but a few. “To agree on a bilateral basis with cloud service providers on standards, set-up of services and contractual clauses is very time-consuming,” says Zwijnenberg. “In addition, they welcome a joint position from the European financial industry. With the ECUC, there is a platform for jointly defining and communicating the position and our requirements.” “As ING, we want consistent and off-the-shelf standards for the financial industry, for both current and upcoming cloud services,” she adds. “These standards should, in turn, increase flexibility, decrease switching costs and reduce potential concentration risk. The other key factor that led to the setting up of the ECUC is to share knowledge and best practices in an informal way within the coalition.”
“The purpose of the ECUC is to unite financial institutions as cloud users on a level playing field and to channel our requirements into a joint position to leverage European standards for the use of public cloud services in the financial industry.”
Beate Zwijnenberg
The ECUC has been constructed as a forum for discussion within the financial services industry and as a platform to give the industry a voice, not only when engaging with cloud services providers (CSPs), but also when discussing the future of cloud with regulatory bodies.
The financial services industry is keen to exploit public cloud solutions to improve time-to-market and time-to-value, as well as security and flexibility. But first it needs to ensure that it has a united front in addressing relationships with both CSPs and regulators, as well as discussing problems and solutions among themselves.
Through the ECUC, banks have precisely such a platform, one which could bring mutual benefit to all stakeholders.
22.3%
Expected CAGR of the global finance cloud market over the forecast period of 2021–26.
Mordor Intelligence 48
“Cloud service providers can solve specific challenges once and, in doing so, satisfy multiple customers at the same time, leading to compliant and secure cloud solutions for financial institutions,” Zwijnenberg believes. “Regulators could leverage our requirements to formulate thresholds for CSPs in order to be appropriate for banks.”
Speaking in unison
The ECUC Position Paper provides a clear template for how its members want to approach key issues –
not only those relating to specific pieces of legislation such as DORA, but also the broader themes of outsourcing, risk management, data security, and data privacy requirements. It further includes specific points requiring model terms for cloud service agreements. These function as a checklist for banks to use in constructing their own cloud service agreements.
“The purpose of the ECUC is to unite financial institutions as cloud users on a level playing field and to channel our requirements into a joint position to leverage European standards for the use of public cloud services in the financial industry,” says Zwijnenberg. “It’s true, it does take time and effort to get 19 financial institutions’ viewpoints aligned, as we’re coming from different starting points and backgrounds. By working together as a large group, we have more impact than each on our own.”
For their part, CSPs have taken notice of the ECUC, regarding it as a coalition to be taken seriously. For the banks, a key advantage is that they no longer have to duplicate their efforts, as they can share knowledge, learn from the lessons of others and pool their collective expertise from different areas to coordinate an approach that suits all members.
“Cloud service providers welcome a joint position from the European financial industry,” argues Tonella. “With the ECUC, there is an efficient structure for defining and communicating this position and the derived requirements, which will then be more likely fulfilled. The synergy of the coalition of these banks definitely makes it easier to address the challenges we are all facing. At the European level, this coalition improves the adoption of cloud services that are fully compliant with European bank regulation.”
“For sure it makes a difference if 19 European banks raise the same points with one voice, as each bank would do it individually,” adds Zeller. “Also, from a communication channel point of view, the points are addressed not with an individual account team from the cloud provider, where information might get lost, but with central counterparts within the cloud providers that focus typically on the security and compliance aspects of their platform.” Banks want to ensure that Europe’s high standards on data protection are applied throughout their cloud services, wherever in the world they’re hosted. Though in its early days, the ECUC is helping the industry make great strides towards making this a reality. With every bank moving key services into the cloud, or at least examining its potential benefits, the ECUC’s membership could continue to grow, giving the industry an even stronger voice in shaping how this revolutionary technology defines the industry. ●
Future Banking /
www.nsbanking.com
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