APRA released updated guidance, in the form of an Information Paper, on the use of shared computing services, such as cloud, by APRA-regulated entities. The new paper acknowledges that advancements in cloud computing service offerings over the past three years have improved the ability of APRA-regulated entities to manage the risks involved. However, it also emphasizes the need for entities to be mindful of the differing levels of responsibility for operating and managing these arrangements.
This Information Paper is relevant for a broad audience including boards, senior management, risk management, technical specialists, and internal audit. APRA has a number of existing prudential standards and practice guides that are pertinent to cloud computing services. These Prudential Standards and Prudential Practice Guides include CPS 231 Outsourcing; SPS 231 Outsourcing; HPS231 Outsourcing; PPG 231 Outsourcing; SPG 231 Outsourcing; CPS 232 Business Continuity Management; SPS 232 Business Continuity Management; CPG 233 Pandemic Planning; (draft) CPS 234 Information Security, CPG 234 Management of Security Risk in Information and Information Technology; and CPG 235 Managing Data Risk. This Information Paper applies the concepts included in these standards and guides and APRA intends to reflect the principles in this paper in future guidance updates. For the purpose of this paper, APRA has classified these risks into three broad categories: low, heightened, and extreme.
- For arrangements with low inherent risk not involving offshoring, APRA would not expect an APRA-regulated entity to consult with APRA prior to entering into the arrangement.
- For arrangements with heightened risk, APRA would expect to be consulted after the APRA-regulated entity’s internal governance process is completed.
- For arrangements involving extreme inherent risk, APRA encourages earlier engagement as these arrangements will be subjected to a higher level of scrutiny.
The new Information Paper updates information on prudential considerations and key principles issued to APRA-regulated entities in July 2015. It has been developed in response to the growing use of the cloud by APRA-regulated entities for higher inherent risk activities and in response to the observed areas of weakness in how entities approach and manage these risks. APRA-regulated entities should note that while this information paper does not constitute formal regulation, APRA intends to incorporate the better practices described in the paper into prudential standards and practice guides in the future. Any such changes will be subject to APRA’s normal processes of consultation.
Keywords: Asia Pacific, Australia, Banking, Fintech, Cloud Computing, Guidance, APRA
Previous ArticleEBA Launches the 2018 Data Transparency Exercise for EU
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.