Regulators in Europe have continued to publish guidance notes designed to encourage the take-up of cloud computing services. As we report in this Alert, the views of the UK financial services regulator on the risks and issues inherent in cloud usage are likely to be welcomed by regulated financial services firms with UK operations. By contrast, although the EU’s aim is more lofty (to close the gap between cloud providers and customers, no less), it has moved more slowly and has yet to produce anything specific enough to cause potential cloud adopters or providers to rush to change their plans.

In July 2016, the UK’s Financial Conduct Authority (FCA) published its final guidance for UK regulated financial services firms outsourcing to the cloud and other third party IT services (the “FCA Guidance”). Importantly, the FCA clearly states that there is “no fundamental reason” why financial services firms cannot use public cloud services, as long as they comply with the FCA’s rules. Of course, for U.S.-based or operating financial services firms, the guidance published by the federal financial regulatory agencies – now more than 4 years ago – will also be relevant.