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Zimbabwe’s Central Bank wants to rein in cloud-driven Fintech

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Zimbabwe , 22 Aug 2022

The Reserve Bank of Zimbabwe (RBZ) says there are reputational, operational and legal risks associated with cloud banking and using cloud to host data processes. The Central Bank said it plans to release guidelines to govern cloud migration, services and application.

Companies in the Southern African country have continued to lean on cloud computing and inter-operability to deploy datacentres to ensure cross-platform usage of Fintech services.

COVID-19 fast-tracked migration to the cloud, but RBZ is concerned about the level of risk in banks outsourcing cloud computing.

In its mid-term monetary policy statement released this month, RBZ said: “Over the last few years the Bank has noted the banking sector extensively using outsourcing as a means for reducing costs and achieving certain strategic objectives, particularly in the cloud banking and computing area.”

John Mangudya, Governor of RBZ, said in order to correct this, the Central Bank is now developing “an outsourcing prudential standard to provide guidance to banks to adopt sound risk management practices for effective oversight, due diligence and management of risks arising from such outsourcing” activities of cloud computing.

“The guidelines will emphasise the need for an outsourcing strategy, governance and risk management as well as relevant policies and procedure manuals. Institutions shall be expected to conduct thorough due diligence reviews with the assistance of qualified auditors, as applicable,” noted Mangudya.

RBZ will be informed by the Data Protection Act and best practices and standards across the global financial system in its guidelines for cloud computing modalities for the banking sector.

Experts say with the rise of broadband penetration, Zimbabwe’s economy “remains a huge market” for cloud computing.

Regional IT consultancy company Tano Digital Services noted: “As enterprises move deeper into the cloud, they can decide what is core to the successful and ongoing operations of their business, and what can be better run as a managed service whenever and however the need arises.”

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