Financial Supervisory Authority issues circular for Hungarian financial institutions on the use of cloud computing technologies

Márton Domokos writes for “The Privacy Advisor” that On 18 July, the Hungarian Financial Supervisory Authority-PSZÁF (HFSA) issued a circular for Hungarian financial institutions on the use of cloud computing technologies. It is the first time in Hungary that a regulatory authority issued such an opinion. The document outlines detailed proposals for financial institutions on data classification, pre-contracting tasks and the contents of the service agreement with the cloud provider.

Regulatory considerations

The HFSA expressly reminds the management, IT internal audit, compliance and legal departments of financial institutions that if the company is willing to use cloud computing services, they shall pay particular attention to the following.

Obtaining cloud services is considered as “outsourcing” under the Hungarian sector-specific regulations which results in the application of certain additional rules; e.g., notification to the HFSA, specific data processing obligations.
It is important to continuously monitor the changes in the regulations of the EU affecting cloud computing services, practices and best practice recommendations.
It is also essential to keep an eye on the Hungarian and EU data privacy provisions and practices—in particular to practices and resolutions concerning cross-border data transfers or data transfers to third countries.
The relationship between the master services agreement to be concluded and the related SLAs shall be harmonised.
Data classification

According to the HFSA, it is important to classify the data processed by the financial institution before determining which data can be transferred to the cloud at all. The circular states that it is not recommended to process bank secrets, personal data or other sensitive data in the public cloud and reminds that the physical storage or place of procession of data in the public cloud in particular, e.g., outside of the European Economic Area or the Safe Harbor, substantially influence the possibility of compliance with the EU data protection regulations.

Read the whole text HERE.

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