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

U.S. Treasury | Release | Feb 8, 2023

U.S. treasury report cloud based fintech benefits and challenges 1 - U.S. Treasury Report:   Benefits, Challenges Facing Cloud-Based Fintech AdoptionThe U.S. Department of the Treasury today released a report on the potential benefits and challenges associated with the increasing trend of financial sector firms adopting cloud services technology.

  • Overview: While cloud services can increase access and reliability for local communities as well as empower community banks to compete with financial technology firms, the report found that financial service firms ramping up their reliance on cloud-based technologies need more visibility, staff support, and cybersecurity incident response engagement from Cloud Service Providers (CSPs).
    • Report Background: The first-of-its-kind report is the product of months of work in coordination with members of the Financial and Banking Information Infrastructure Committee (FBIIC) and was developed with extensive input from U.S. regulators, private sector stakeholders, trade associations, and think tanks. The report does not impose any requirements and does not endorse or discourage the use of any specific provider or cloud services.


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  • In assessing the current state of cloud adoption in the financial sector, Treasury found that cloud services could help financial institutions become more resilient and secure, but that there were some significant challenges that could detract from these benefits. These include:
    • Insufficient transparency to support due diligence and monitoring by financial institutions.  Community banks expressed concerns that they do not often receive details of incidents or outages impacting their systems.
    • Gaps in human capital and tools to securely deploy cloud services.  The current talent pool needed to help financial firms tailor cloud services to better serve their customers and protect their information is well below demand. 
    • Exposure to potential operational incidents, including those originating at a CSP. Many financial institutions have expressed concern that a cyber vulnerability or incident at one CSP may potentially have a cascading impact across the broader financial sector.
    • Potential impact of market concentration in cloud service offerings on the financial sector’s resilience.  The current market is concentrated around a small number of CSPs, which means that if an incident occurs at one CSP, it could affect many financial sector clients concurrently. 
    • Dynamics in contract negotiations given market concentration. The limited number of CSPs may give CSPs outsized bargaining power when contracting with financial institutions.
    • International landscape and regulatory fragmentation. The patchwork of global regulatory and supervisory approaches to cloud technology can make it nearly impossible for U.S. financial institutions to adopt cloud consistently at a global scale, reducing CSP use in the market and raising costs for cloud adoption strategies, which ultimately impacts consumers.

View the original press release --> here

Download the 71 page PDF report --> here

NCFA Jan 2018 resize - U.S. Treasury Report:   Benefits, Challenges Facing Cloud-Based Fintech AdoptionThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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