This blog post was authored by Jeff Bullwinkel, Associate General Counsel and Director of Corporate, External & Legal Affairs, Microsoft Asia Pacific & Japan
Today more than ever, financial institutions are under intense pressure to embrace new and emerging technologies. Driving this is the need to offer customers a digital experience that is on one hand personalized and always-on, and on the other hand competitive to the services of rivals and fintech disruptors.
While the benefits of cloud technologies are well publicized and widely understood, they are nonetheless worth reiterating. Cloud enables businesses to scale up, scale down and amend their information technology needs at will; minimize hardware costs; and access robust disaster recovery, while providing the latest versions of products with heightened levels of security.
Yet despite these benefits, certain barriers to adoption remain. This is particularly noteworthy among financial institutions including banks, insurance companies and other regulated institutions, where in some markets uncertainty remains about the ability to move to the cloud and continue to maintain regulatory compliance.
An added challenge for multinational financial institutions, with an on-the-ground presence in a number of countries across the Asia Pacific is the region’s varied regulatory landscape. Laws pertaining to cloud differ from country to country, as do the perceptions of what various regulators will permit.
A recent thought-provoking paper by Forrester Consulting, commissioned by Microsoft, highlights how in markets where firms know and understand the regulations and the regulator, there has been early and widespread adoption of technologies including cloud services. The study further reveals that clarity in the understanding of applicable regulations can be assisted where regulators and other related government authorities continually communicate their guidance and expectations in a clear and transparent manner.
Such clear guidance has encouraged financial institutions to leverage the array of benefits that cloud adoption presents. The study contrasts markets where clear guidance has been provided with markets where there has been limited guidance on cloud. In markets where there has been less clarity, financial institutions are not adopting cloud technologies either as quickly or in as widespread a manner as regulators might in fact wish to promote. The study revealed that in these markets, financial institutions were unsure about how they could leverage cloud technology and remain compliant with local regulations.
The Forrester study pinpoints the need for all parties ― namely cloud service providers, financial services institutions, industry associations and financial regulators ― to regularly collaborate and communicate on industry developments and expectations. Indeed, we believe that Microsoft and other cloud providers have a responsibility to actively participate in this sort of partnership in order to foster a common understanding and approach with respect to the regulation of technology.
At Microsoft, we are committed to ensuring that our customers are continually informed about the latest developments in cloud technologies and how they can best leverage these technologies to meet their organizational needs in the context of the wider and cross-sectoral digital transformation that’s now underway. We are also committed to ensuring that our customers are frequently updated on security matters and other information technology risks that may impact their day-to-day operations or their perception of cloud services ― and we take this approach to foster a more informed understanding of how technology can be used not only to enable a more vibrant financial services ecosystem, but also to create a more trusted and secure environment.