Potential Risks of Cloud Computing in Financial Institutions in Tanzania: Perspectives from CRDB Bank Plc

Abstract

The adoption of cloud computing introduces a range of potential risks that financial institutions must navigate with prudence. Cloud service providers are entrusted with valuable customer information, and any compromise could have severe consequences, including financial losses and reputational damage. The main objective of this research was to assess the potential risks of cloud computing in financial institutions in Tanzania. This is done in the context of CRDB bank. The research employed a mixed methods approach, incorporating both quantitative and qualitative data collection methods. The data was acquired through questionnaires, specifically targeting the employee population of CRB bank. The data underwent quantitative analysis. The research sampled population is 201 respondents from ICT, legal and procurement departments at the financial institution. Cloud computing poses hazards that financial organizations must carefully manage. Security of sensitive financial data comes first. Any compromise of cloud service providers' client data could result in financial losses and reputational damage. Data privacy risks occur as legislative contexts change. Cross-border cloud services can challenge data sovereignty and local legislation. Another crucial factor is operational continuity. Financial institutions depend on uninterrupted service, putting them exposed to cloud service provider outages and technical issues. Maintaining financial services and client satisfaction are crucial. The regulatory compliance challenge is unique. Cloud computing requires vigilance in local and international legal systems. To retain financial ecosystem confidence, financial institutions must ensure their cloud-based solutions meet industry standards and laws. The study stressed the importance of a holistic strategy to cloud computing in financial institutions like CRDB Bank PLC. Cloud technology has many benefits, but stakeholders must be cautious and implement risk management and mitigation strategies. The conclusions of this study can help CRDB Bank PLC and other Tanzanian financial institutions make educated cloud technology implementation decisions. These decisions must prioritize financial system security, privacy, and resilience. The results also highlight the need for financial industry-regulatory cooperation to keep the regulatory framework up to date with technology.