{"id":335603,"date":"2025-08-11T11:34:09","date_gmt":"2025-08-11T11:34:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/335603\/"},"modified":"2025-08-11T11:34:09","modified_gmt":"2025-08-11T11:34:09","slug":"sa-financial-institutions-face-cloud-computing-regulation","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/335603\/","title":{"rendered":"SA financial institutions face cloud computing regulation"},"content":{"rendered":"

Financial institutions in South Africa could soon face new regulations on the use of cloud computing and data offshoring, as the country\u2019s regulators have warned that directors and senior managers are responsible for managing risk in those areas.<\/strong><\/p>\n

South Africa\u2019s financial regulators have clarified their stance on cloud computing and data offshoring, warning financial institutions that they intend to regulate those practices, and that senior managers are responsible for risk management.<\/p>\n

A 25 July joint communication from the Reserve Bank of South Africa<\/strong> and the Financial Sector Conduct Authority<\/strong> (FSCA) noted \u201cthat some financial institutions may already be using cloud computing and\/or data offshoring services through outsourcing arrangements, either with cloud service providers and\/or through insourcing arrangements with a parent organisation\u201d.<\/p>\n

Currently the only regulation in this space in South Africa is a 2018 directive and guidance note. Now the regulators \u201care considering whether policy interventions are necessary to mitigate risks in this environment\u201d and \u201chave commenced a process of formulating a regulatory instrument focused on introducing requirements pertaining to the use of cloud computing and data offshoring by financial institutions\u201d, to be published for public consultation \u201cin due course\u201d.<\/p>\n

RISK-BASED APPROACH<\/strong><\/p>\n

Founded in 2018 and headquartered in Pretoria, the FSCA is the principal regulator for financial institutions in South Africa, while the Reserve Bank is responsible for the country\u2019s monetary policy and financial services supervision, which it does through the Prudential Authority<\/strong>.<\/p>\n

They recommended that each institution take a risk-based approach aligned with its \u201crisk appetite, based on the nature, size and complexity of its operations\u201d.<\/p>\n

Specific measures include \u201cappropriate governance structures, processes, and procedures to oversee the use of cloud computing\u201d, such as formal policies, data strategies and governance frameworks, as well as contractual and other legal requirements, and \u201cappropriate due diligence\u201d.<\/p>\n

FUTURE REGULATION<\/strong><\/p>\n

The authorities also warned that they will take further regulatory and supervisory actions, including a joint standard on cloud computing and data offshoring. Regular day-to-day supervision of the financial sector, including data and computing matters will also continue, they added.<\/p>\n

FSCA\u2019s three-year regulation plan, published in July 2024<\/a>, proposed stricter risk management standards, amid concerns that it had fallen behind other jurisdictions. The agency previously regulated crypto assets in 2022<\/a> by declaring them a financial product.<\/p>\n","protected":false},"excerpt":{"rendered":"Financial institutions in South Africa could soon face new regulations on the use of cloud computing and data…\n","protected":false},"author":2,"featured_media":335604,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3164],"tags":[14270,3284,2814,34672,477,120130,120131,53,16,15],"class_list":{"0":"post-335603","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-computing","8":"tag-cloud-computing","9":"tag-computing","10":"tag-data","11":"tag-financial-sector-conduct-authority","12":"tag-information-technology","13":"tag-prudential-authority","14":"tag-reserve-bank-of-south-africa","15":"tag-technology","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115009923607452694","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/335603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=335603"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/335603\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/335604"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=335603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=335603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=335603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}