Featured Product

    FFIEC Issues Statement on Risk Management for Cloud Computing Services

    April 30, 2020

    FFIEC, on behalf of its members, issued a statement to address the use of cloud computing services and security risk management principles in the financial services sector. The statement highlights examples of risk management practices for a financial institution’s safe and sound use of cloud computing services and safeguards to protect the sensitive information of consumers. The statement also provides a list of government and industry resources and references to assist financial institutions using cloud computing services.

    The statement does not contain new regulatory expectations, though it highlights that management should not assume that effective security and resilience controls exist simply because the technology systems are operating in a cloud computing environment. The statement identifies the responsibilities financial institutions would have when contracting with cloud computing providers. Examples of relevant risk management practices for assessing risks related to and implementing controls for cloud computing services include the following:

    • The financial institution’s plans for the use of cloud computing services should align with its overall IT strategy, architecture, and risk appetite. This includes determining the appropriate level of governance, the types of systems and information assets considered for cloud computing environments, the impact on the financial institution’s architecture and operations model, and management’s comfort with its dependence on and its ability to monitor the cloud service provider.
    • Appropriate due diligence and ongoing oversight and monitoring of cloud service providers’ security is required. As with all other third-party relationships, security-related risks should be identified during planning, due diligence, and the selection of the cloud service provider.
    • Contracts between a financial institution and cloud service provider should be drafted to clearly define which party has responsibilities for configuration and management of system access rights, configuration capabilities, and deployment of services and information assets to a cloud computing environment, among other things.
    • An effective inventory process for the use of cloud computing environments is an essential component for secure configuration management, vulnerability management, and monitoring of controls.
    • Common practices for identity and access management for resources using cloud computing infrastructures include limiting account privileges, implementing multi-factor authentication, frequently updating and reviewing account access, monitoring activity, and requiring privileged users to have separate usernames and passwords for each segment of the cloud service provider’s and financial institution’s networks.
    • Operations moved to cloud computing environments should have resilience and recovery capabilities commensurate with the risk of the service or operation for the financial institution. Management should review and assess the resilience capabilities and service options available from the cloud service provider. 

    The risk management considerations outlined in the statement provide a summary of key controls that management may consider as part of assessing and implementing cloud computing services. However, specific risk management and controls will be dependent on the nature of the outsourced services and the specifics of the cloud implementation. Additional information on general third-party risk management and outsourcing practices is available in the FFIEC Information Technology Examination Handbook’s “Outsourcing Technology Services” booklet and other documents published by the FFIEC members.

     

    Related Links

    Keywords: Americas, US, Banking, Cloud Computing, Risk Management, Governance, Cyber Risk, FFIEC

    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521