Central banking and cloud services
The new frontier
Use of the public cloud is fast becoming ubiquitous in financial services, but central banks are lagging the private sector in embracing it. Nevertheless, they are increasingly receptive to the benefits of adopting public cloud architecture and are beginning to learn from and build on the experiences of commercial banks that have progressed further in their cloud adoption.
At least in the short term, certain private sector financial institutions are opting for a hybrid approach, keeping the most sensitive data – personally identifiable information – in on-premises storage, while benefitting from the superior technology available from cloud service providers for less sensitive data.
As comfort around encryption capabilities grows, organisations are likely to start migrating more sensitive data to public clouds as well, to the extent permitted by regulation. However, central banks are reluctant to relinquish the control over their data that an on-premises architecture gives them. This is despite the fact that they have many of the same needs as private sector enterprises, as well as the same responsibilities to keep their data and infrastructure safe from cyberattack or ordered release.
For this report, we conducted interviews with central banks and private, regulated financial infrastructure providers on their cloud strategies, building up a picture of what cloud can offer central banks and the challenges they face in adopting it. As well as exploring the benefits that cloud migration gives central banks, we examine the ways in which financial institutions in the private sector have addressed the hurdles that are hampering central bank cloud adoption. Some of these challenges are technical, some are legal, while others are cultural, and different solutions are needed to address each.
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