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Malaysian banks require clearer regulatory guidelines on cloud services

Malaysian banks

A top Malaysian cloud advisory and cloud consultancy firm has called on Bank Negara to provide greater regulatory support and guidance for the adoption of cloud services for Malaysia-based banks, financial services institutions (FSIs) and related players.

The cloud has been the computing model of choice, growing at 100% adoption rate over the last 12 months across all general Malaysian industries, covering local businesses in the private and public sector including SMEs, governmental bodies and large conglomerates, according to G-AsiaPacific Sdn Bhd.

The firm’s director Goh Kiang Kian said the FSI sector has been hesitant in a definitive adoption of cloud although this sector is expected to get the most benefits from it. He said, “Though cloud adoption by FSIs could spur more fintech innovation which, will ultimately contribute to cost efficiencies and better profit margins, there is huge delay in cloud adoption by these players in Malaysia because there is no clear local regulatory guidelines on cloud services.

“This could now be resolved based on the recent positive regulatory changes on guidelines for cloud services internationally.”

“The message by MAS proves that the fears of security risks in the cloud are unfounded, and this computing model has matured sufficiently for banks, insurance companies and other financial service providers to adopt,” he noted.

Citing MAS’ decision and support as a timely move, Goh says that given the current pace of disruption in the conventional banking sector, Cloud will provide the added cost efficiencies, data storage and management functions and system support benefits for local banks to operate with greater flexibility that will deliver economies of scale for their regionalisation strategies.

Goh added, “Bank Negara is a major regulatory body in South-East Asia. It is one of the best authorities to help boost the adoption of cloud amongst local FSI players. Cloud adoption regulations that set the parameters and requirement ‘checklist’ – for data movement, cross border transactional processes, audit logs, security and authorisation levels. Having these clearly set out will definitely clear the way for more confident decisions by FSI players to adopt cloud”.

Paul

The author Paul