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Cloud computing

What is cloud computing?

Cloud computing

Cloud computing represents the way of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer. Many business functions across financial services are moving to the cloud with the aim of leveraging greater scale, cost-effectiveness, more efficient use of IT resources and standardisation enabled through cloud.

A cloud in a blue sky overlaid with a drawing of nets

It is important to note that, for any use of core banking services in the ‘public cloud‘, an institution is not relieved from its responsibilities with respect to confidentiality, integrity and availability of data. These requirements are expected to be ensured through proper contracts, monitoring and auditing as prescribed in the EBA Recommendations on outsourcing to cloud service providers.

The public cloud is one of the deployment models of the cloud; in it, essentially, the cloud infrastructure is available for open use by the public. The cloud service provider (CSP) controls or owns the network that connects the data centres and regions. All regions are connected and can be used as alternatives to the region set as primary by the institution. This setup is said to provide a fault-tolerant solution. A number of CSPs across Europe offer public cloud services. The CSPs are often country specific, with the technical infrastructure often set up on two or three data centres from which the services run. In this setup, used in several European countries, one CSP provides core banking/payment/e-money services to more than one institution, using the same core system and storing the different institutions’ data in the same technical infrastructure.

Another deployment model of the cloud is the ‘private cloud‘, where the cloud infrastructure is made available for the exclusive use of a single institution. There are two types of private cloud, the first one operated by the institution itself, and the second one where the private cloud is operated by a (CSP). Using the first type, institutions run the operation in-house on their own hosting infrastructure, with staff managing and running the infrastructure, while in the second case the CSP provides all the technical infrastructure, including running the infrastructure, and the institutions manage and monitor the CSP’s operations. In the second outsourcing setup, the technical infrastructure of the systems is dedicated only to one institution albeit some areas are still shared, such as the data centres and networks.


Documents of international standardization institutions

European Supervisory Authorities

International Financial Market Regulation Organizations