FINRA (Financial Industry Regulatory Authority) released a review of cloud adoption trends and a request for comments on how they are unfolding in the industry. Cloud computing is increasingly seen by many firms as an important architectural component to their infrastructure. Within the securities industry, broker-dealers are adopting or exploring the adoption of cloud computing services in multiple ways.
Firms are looking at the cloud to be able to scale operations flexibly, build robust solutions for business continuity, and create an environment for launching products more quickly to market. However, when seeking to migrate to the cloud, firms are likely to want to consider the potential business, operational, and regulatory implications.
Although a firm may shift its technology infrastructure to a cloud environment, all of the regulatory requirements that are applicable in an on-prem environment continue to apply. However, cloud-based applications may contain some unique features that securities market participants may wish to consider as they explore and adopt related technology tools.
Specifically, where applicable, factors for market participants to consider when seeking to adopt a cloud environment include cybersecurity, data governance, outsourcing/ vendor management, business continuity, and recordkeeping.