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OMFIF Report on Central Banks and Cloud Services: New Frontier

OMFIF | July 5, 2023

Digital Monetary Institute Central Banks and Cloud Services - OMFIF Report on Central Banks and Cloud Services:  New Frontier

Insights from interviews with central banks and regulated financial infrastructure providers on central banking and cloud services

  • Many institutions are adopting a hybrid approach to data management, leveraging advanced cloud technology for less sensitive data while keeping personally identifiable information secure in on-premises storage. However, central banks remain cautious, valuing the control that on-premises architecture offers over their data.
  • Central banks face regulatory hurdles when considering the adoption of cloud technology. Governments often have policies that limit the use of public cloud infrastructure by public institutions. Overcoming these regulatory challenges requires clear understanding of central banks' data infrastructure needs and the solutions that cloud providers can offer.

See:  U.S. Treasury Report: Benefits, Challenges Facing Cloud-Based Fintech Adoption

  • Opportunity:
    • Cloud services offer flexible access to large-scale computational power, which is particularly beneficial for central banks managing payment systems or using artificial intelligence and machine learning for large volumes of data analysis. The pay-as-you-go model of cloud services makes it economically efficient.
    • Adopting cloud technology can help central banks overcome staffing challenges. The marketplace for data technology professionals is competitive and public institutions often find it difficult to compete with the salaries offered by the private sector. Cloud services allow much of the responsibility for data center management to be outsourced.
    • Cloud technology can simplify disaster recovery efforts. Cloud services can store copies of customers’ architecture in multiple locations simultaneously, allowing customers to switch from their primary data center to a redundancy option with little or no loss of data. However, cloud migration also brings its own challenges from a disaster recovery perspective.

Download the 16 page PDF report --> here


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