NAVIGATING RISK TRANSFORMATION: ROAD TO CLOUD
Over the past two decades, cloud computing has evolved significantly. However, a remarkable step change has occurred in the last four to five years. Regulated financial institutions (FIs) have increasingly embraced cloud technology for their risk operational functions, and regulators have recognised the advantages of this transition.
This transformation has been made possible by significant advancements in cloud computing services within the last three years, which have enhanced the capability to effectively manage associated risks, such as cyber crime, data breaches and other vulnerabilities.
This shift is especially crucial in the wake of the recent Silicon Valley Bank (SVB) collapse, where the combination of interconnected risks including interest rate risk, liquidity risk and concentration risk played a significant role. Although regulators see the benefits of financial services companies moving to the cloud, regulatory guidance remains prescriptive. It is the responsibility of the FIs to understand the risks involved and manage them appropriately.
But why should organisations consider moving their operations to the cloud? Is it simply a matter of keeping up with industry trends? While staying competitive is important, the decision to migrate to the cloud should be driven by genuine business value, extending beyond apparent technical advantages.
It is essential for organisations to evaluate whether cloud adoption aligns with their specific needs and goals before embarking on the journey to cloud. The recent SVB collapse serves as a stark reminder of the potential consequences of not effectively managing risk in an integrated fashion and to use this learning to address and strengthen identified weaknesses when considering a move to cloud.
Jan-Mar 2024 Issue
SAS