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Banks outsourcing to the cloud: The economic drivers and regulatory implications
The financial services sector is becoming increasingly reliant on cloud service providers (CSPs) to fulfil its growing data processing and storage needs.
United States | Publication | January 2025
Norton Rose Fulbright’s 2025 Annual Litigation Trends Survey indicates that cybersecurity and data privacy issues continue to be a challenge for organizations amid escalating cyberattacks, growing disclosure burdens and uncertainty stemming from AI tools.
More than a third (36%) of respondents say their organizations were more exposed to cybersecurity and data privacy disputes over the past 12 months – the greatest increase in any dispute category for the second year in a row. This issue is unlikely to abate any time soon, as the majority of respondents expect their exposure to stay the same (46%) or grow even more (33%) in 2025.
Disputes are a particular concern to industries like healthcare and financial services that amass large volumes of highly sensitive data. Forty-five percent and 41% of respondents in these industries, respectively, report increased exposure. Such critical infrastructure appears to be a favorite target for cybercriminals.
The increase in dispute risk is a significant concern for technology respondents as well, with approximately half (49%) saying their exposure deepened over the last year. Major technology companies have faced backlash and legal action due to data privacy concerns involving AI training data, including those around feeding personal and copyrighted data into proprietary AI systems for training purposes.
In fact, 61% of respondents across all industries who anticipate more exposure to cybersecurity and data privacy disputes expect the increasing use of AI and corresponding data issues to be a contributor to these disputes going forward – a nine-percentage-point increase compared to last year and the most selected contributing factor.
Navigating the shifting patchwork of data privacy regulations is also a challenge. More than half (58%) of these respondents also said compliance with evolving cybersecurity and data privacy regulations and requirements is an issue that could heighten their exposure in the coming year, compared to just 43% who said the same in 2024.
Download the 2025 Annual Litigation Trends Survey report for more details.
Publication
The financial services sector is becoming increasingly reliant on cloud service providers (CSPs) to fulfil its growing data processing and storage needs.
Publication
On August 1, 2025, the UK Supreme Court delivered its long-awaited judgment in Hopcraft v Close Brothers Limited and on 3 August the FCA announced it would consult on a redress scheme.
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The European Banking Authority (EBA) is currently consulting on its draft guidelines on the sound management of third party risk (Draft Guidelines), which are intended to replace the 2019 guidelines on outsourcing arrangements (2019 Guidelines).
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