Financial services institutions (FSIs) across the Asia Pacific region still lack thorough understanding of cloud-related banking regulations, according to a Microsoft-commissioned Forrester Consulting study.
The 'Cloud is critical to digital transformation in the APAC financial sector' study said that FSIs must understand cloud-related banking regulations, formalise internal cloud policies, and implement best practices for engaging with cloud providers and banking regulator as they adopt cloud computing.
The study found that that leading FSIs in the region are using regulations to help steer public cloud initiatives, instead of an excuse to stop them. The better the firms' understanding of regulations, the more likely they are to embrace public cloud services. In most instances, these initiatives are directly tied to customer-facing, digital banking capabilities like new customer acquisition and on-boarding.
Despite that, most of the FSIs surveyed still perceived restrictions to cloud adoption/usage that aren't actually present in regulations.
They are, however, reaching out to regulators more proactively and frequently to build relationships, establish trust, and address potential compliance issues earlier in the process. This helps them improve their understanding of cloud regulations.
The study also revealed that FSIs expect cloud providers to actively engage regulators to help shape their cloud delivery models and practices. This is to ensure that proposed cloud initiatives are compliant with local and regional regulations before they are implemented.
"Today, the attitudes toward implementing cloud and the related internal policies among FSI in Asia Pacific is clearly maturing... but a cloud strategy can only be successful if there is a clear understanding of cloud-related regulations," said Jeff Bullwinkel, associate general counsel & director, Corporate, External, and Legal Affairs (CELA), Microsoft Asia Pacific & Japan
"As FSIs understanding of regulations increases, so too does their understanding of how and when to engage regulators and, then in turn, their readiness to adopt cloud solutions," he added.
The study surveyed 34 senior IT decision makers in FSIs from Australia, Hong Kong, Korea, Malaysia, New Zealand, Japan, Indonesia, Singapore and the Philippines. It evaluated cloud adoption trends among FSIs and gauged their knowledge and perceptions of cloud-related financial regulations. It also analysed the impact of regulatory compliance, security and privacy, and reliability concerns on current and future cloud initiatives.
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