Israeli Regulator Opens the Gates for Free Use of Cloud Banking Technology
The Israeli Banking Supervision Department has announced that it will allow banks to use cloud computing technologies without needing special regulatory permission. This marks a change from the previous arrangement, whereby companies were required to obtain the regulator’s explicit permission.
The reason for taking this step, according to the Banking Supervision Department, is due to the advantages of such technologies and their ability in order to improve their flexibility and response time in the development of new products, improve their services to customers, increase the banks' efficiency, and cooperate with Fintech companies.
The draft amendments to the IT Management Directive and the Cloud Computing Directive have removed the requirement to request permission from the Banking Supervision Department on each occasion prior to implementing cloud technology for several types of applications, such as storage. Instead, the banking corporation's board of directors and the senior management will bear responsibility for risk management in these cases.
In addition, the regulator has published a draft revision to the Proper Conduct of Banking Business Directive on Board of Directors, which would require the Board of Directors to establish a dedicated committee for information technology and technological innovation within the Board, and limit the term of the chairmen of Board of Directors committees.