FCA Cloud Outsourcing: What Finance Firms Need to Get Right

Moving to the cloud has transformed how financial firms operate. But with that flexibility comes regulatory expectation. The FCA has issued detailed guidance on cloud outsourcing, making it clear that while firms can delegate services, they cannot delegate responsibility.

Key FCA expectations

1. Governance and accountability: Firms must know who is responsible for managing outsourced services. You should have oversight of how data is stored, secured, and accessed.
2. Resilience and continuity: Cloud systems must be robust. Regular testing should prove that your business can continue operating during a service outage or cyber incident.
3. Exit planning: You need a documented plan for how to move your data or switch providers without interrupting operations.
4. Data location and security: The firm must know where data physically resides and ensure it meets UK data protection laws.

Common pitfalls

Many firms assume the cloud provider handles everything. In reality, security and compliance are shared responsibilities. Without proper governance, you can still fall short of FCA expectations even if your cloud provider is reputable.

We work with hedge funds and finance organisations to:

• Assess current cloud arrangements against FCA requirements
• Build resilience testing and failover plans
• Create exit and data portability strategies
• Implement monitoring and reporting for ongoing compliance

Our goal is to make compliance practical not painful. The right cloud setup should protect client data, maintain flexibility, and support growth without creating unnecessary complexity.

Cloud services can be powerful tools for finance firms. The key is to use them with the right controls in place.