ABBL responds to the ECB consultation on outsourcing cloud services to cloud service providers

Summer 2024 has been a busy period for the ABBL and its advocacy actions.

In this regard, the European Central Bank (ECB) conducted a public consultation that run until mid-July on its draft Guide on outsourcing cloud services to cloud service providers. The consultation aimed to gather feedback on supervisory expectations for financial institutions outsourcing critical functions to the cloud. With the growing reliance on cloud technologies, the ECB seeks to ensure that risks related to operational resilience and cybersecurity are effectively managed.

Considering the importance of cloud computing for the growing number of its members, the ABBL provided a comprehensive response to the ECB’s consultation on outsourcing cloud services to cloud service providers.

Key proposals and concerns

Key proposals and concerns

Below are the key proposals and concerns raised by the ABBL:

• ABBL calls for the ECB’s guide to align more closely with DORA and EBA Outsourcing Guidelines, arguing that additional requirements could lead to regulatory fragmentation.
• ABBL stresses the need for a risk-based, proportional application of the ECB’s guidance, ensuring expectations match the complexity and criticality of the outsourced services.
• The ABBL recommends applying a materiality threshold to subcontractors to avoid unnecessary complexity in managing cloud supply chains.
• ABBL raises concerns about the requirement to maintain backups with a different CSP, citing significant technical challenges and proposing more flexible backup solutions.

By responding to the ECB’s consultation, the ABBL aims to ensure that financial institutions can adopt cloud technologies without facing unnecessary regulatory burdens or competitive disadvantages. Moving forward, the ABBL will continue to engage with national and EU regulators to promote a balanced approach that supports innovation while safeguarding the stability of the financial sector.

Discover ABBL’s full response to the consultation

ABBL Response to ECB Consultation on outsourcing cloud services to cloud service provider 15/07/2024