MANILA, Philippines – Employing cloud computing would help small banks increase their competitiveness, the Bangko Sentral ng Pilipinas (BSP) said.
“It’s a cost-effective way for them to be able to store, manage data without having to invest heavily in infrastructure,” BSP Deputy Governor Nestor A. Espenilla Jr. told reporters.
“Actually, it’s a solution which upgrades the competitiveness of small institutions,” he continued.
The BSP recently approved the issuance of an enhanced Information Technology Risk Management for financial institutions which includes the need for banks and non-bank financial institutions to adopt cloud computing to improve their services.
Cloud computing utilizes the Internet to store and share information. Firms can use a private cloud which will be solely for their own use or a public cloud, which the public or a group of companies can use. Firms can also opt to use a mix of both.
“I think we’re actually a pioneer in formulating a regulation that allow banks to do cloud computing,” Espenilla said.
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Regulators in the Philippines and Singapore are the among the first in the Association of Southeast Asian Nations (ASEAN) to issue specific guidelines for the use of cloud computing for banks and other financial institutions, Espenilla said.
The mandate in the Philippines is effective immediately, he said.
Aside from the use of cloud computing, the BSP has ordered banks to replace automated teller machine (ATM) cards with EMV-enabled ones by January 2017. Banks were also mandated to change ATM machines with units equipped with “triple data encryption standard (3DES)” by January 2015.
EMV cards provide more security for the user versus the usual magnetic-stripe cards, while the 3DES technology basically means data is thrice encrypted so protection is also heightened.