Financial institutions across the globe use AWS to transform the way they do business. It’s exciting to watch our customers in the financial services industry innovate on AWS in unique ways, across all geos and use cases. Regulations continue to evolve in this space, and we’re working hard to help customers proactively respond to new rules and guidelines. In many cases, the AWS Cloud makes it easier than ever before for customers to comply with different regulations and frameworks around the world.
The European Banking Authority (EBA), an EU financial supervisory authority, recently provided EU financial institutions (which includes credit institutions, certain investment firms, and payment institutions) with new outsourcing guidelines (PDF), which also apply to the use of cloud services. We’re ready and able to support our customers’ compliance with their obligations under the EBA Guidelines and to help meet and exceed their regulators’ expectations. We offer our customers a wide range of services that can simplify and directly assist in complying with the new guidelines, which take effect on September 30, 2019.
What do the EBA Guidelines mean for AWS customers?
The EBA Guidelines establish technology-neutral outsourcing requirements for EU financial institutions, and there is a particular focus on the outsourcing of “critical or important functions.” For AWS and our customers, the key takeaway is that the EBA Guidelines allow for EU financial institutions to use cloud services for material, regulated workloads. When considering or using third-party services, many EU financial institutions already follow due diligence, risk management, and regulatory notification processes that are similar to those processes laid out in the EBA Guidelines. To meet and exceed the EBA Guidelines’ requirements on security, resiliency, and assurance, EU financial institutions can use a variety of AWS security and compliance services.
The EBA Guidelines incorporate a risk-based approach that expects regulated entities to identify, assess, and mitigate the risks associated with any outsourcing arrangement. The risk-based approach outlined in the EBA Guidelines is consistent with the long-standing AWS shared responsibility model. This approach applies throughout the EBA Guidelines, including the areas of risk assessment, contractual and audit requirements, data location and transfer, and security implementation.
- Risk assessment: The EBA Guidelines emphasize the need for EU financial institutions to assess the potential impact of outsourcing arrangements on their operational risk. The AWS shared responsibility model helps customers formulate their risk assessment approach because it illustrates how their security and management responsibilities change depending on the AWS services they use. For example, AWS operates some controls on behalf of customers, such as data center security, while customers operate other controls, such as event logging. In practice, AWS services help customers assess and improve their risk profile relative to traditional, on-premises environments.
- Contractual and audit requirements: The EBA Guidelines lay out requirements for the written agreement between an EU financial institution and its service provider, including access and audit rights. For EU financial institutions running regulated workloads on AWS services, we offer the EBA Financial Services Addendum to address the EBA Guidelines’ contractual requirements. We also provide these institutions the ability to comply with the audit requirements in the EBA Guidelines through the AWS Security & Audit Series, including participation in an Audit Symposium, to facilitate customer audits. To align with regulatory requirements and expectations, our EBA addendum and audit program incorporate feedback that we’ve received from a variety of financial supervisory authorities across EU member states. EU financial services customers interested in learning more about the addendum or about the audit engagements offered by AWS can reach out to their AWS account teams.
- Data location and transfer: The EBA Guidelines do not put restrictions on where an EU financial institution can store and process its data, but rather state that EU financial institutions should “adopt a risk-based approach to data storage and data processing location(s) (i.e. country or region) and information security considerations.” Our customers can choose which AWS Regions they store their content in, and we will not move or replicate your customer content outside of your chosen Regions unless you instruct us to do so. Customers can replicate and back up their customer content in more than one AWS Region to meet a variety of objectives, such as availability goals and geographic requirements.
- Security implementation: The EBA Guidelines require EU financial institutions to consider, implement, and monitor various security measures. Using AWS services, customers can meet this requirement in a scalable and cost-effective way while improving their security posture. Customers can use AWS Config or AWS Security Hub to simplify auditing, security analysis, change management, and operational troubleshooting. As part of their cybersecurity measures, customers can activate Amazon GuardDuty, which provides intelligent threat detection and continuous monitoring, to generate detailed and actionable security alerts. Amazon Inspector automatically assesses a customer’s AWS resources for vulnerabilities or deviations from best practices and then produces a detailed list of security findings prioritized by level of severity. Customers can also enhance their security by using AWS Key Management Service (creation and control of encryption keys), AWS Shield (DDoS protection), and AWS WAF (filtering of malicious web traffic). These are just a few of the 500+ services and features we offer that enable strong availability, security, and compliance for our customers.
As reflected in the EBA Guidelines, it’s important to take a balanced approach when evaluating responsibilities in a cloud implementation. We are responsible for the security of the AWS Global Infrastructure. In the EU, we currently operate AWS Regions in Ireland, Frankfurt, London, Paris, and Stockholm, with our new Milan Region opening soon. For all of our data centers, we assess and manage environmental risks, employ extensive physical and personnel security controls, and guard against outages through our resiliency and testing procedures. In addition, independent, third-party auditors test more than 2,600 standards and requirements in the AWS environment throughout the year.
We encourage customers to learn about how the EBA Guidelines apply to their organization. Our teams of security, compliance, and legal experts continue to work with our EU financial services customers, both large and small, to support their journey to the AWS Cloud. AWS is closely following how regulatory authorities apply the EBA Guidelines locally and will provide further updates as needed. If you have any questions about compliance with the EBA Guidelines and their application to your use of AWS, or if you require the EBA Financial Services Addendum, please reach out to your account representative or request to be contacted.
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