At SureTax, we deliver Sales Tax solutions through the cloud, so we're always interested in what's going on with cloud computing and regulation. Also, as developers, we like to think that we stay ahead of the curve. So, this recent article caught our eye, once again proving that technology always seems to stay at least a step ahead of regulation.
On July 10th, the Federal Financial Institutions Examination Council issued a four page report In explains how banking institutions should apply existing guidance to deals they sign for outsourced cloud based deals.
Four pages? That seems a bit thin. Is that disappointing? Sure. Is it surprising? No.
No one should be surprised that regulators are a bit behind the curve in their understanding of cloud computing issues. From steam engines to mobile phones to high speed internet, regulators have been behind the curve.
Why? Guidance on new technology matters tends to trickle up from practitioners, not down from regulators.
Francoise Gilbert, an attorney at the IT LAW GROUP says the FFIEC report is far too shallow to offer banks and credit unions any real insights about precautions they should take when considering cloud computing.
The FFIEC suggests that when considering cloud computing, banks and credit unions continue to follow the same fundamental guidelines and risk strategies outlined in the FFIEC Information Technology Examination Handbook, especially the Outsourcing Technology Services Booklet.
That's interesting, but not insightful. Cloud computing has issues beyond just outsourced technology.
Give it time. The regulators will collect data, sort out what's happening in practice and will provide useful guidelines. It will just take a while.
Read more about the matter here.