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ACCA Applied Knowledge · Business and Technology · The impact of advances in technology

A retailer is considering moving its customer database to a public cloud. Which of the following is the most significant risk that the board should assess before doing so?

The key risk is data protection compliance and reliance on the provider's security. Customer personal data held by a third party, possibly in another jurisdiction, raises legal and security exposure. Scalability, remote access and lower upfront costs are benefits of cloud, not risks.

  1. ALoss of the ability to scale capacity when demand rises
  2. BCompliance with data protection rules and reliance on the provider's securityCorrect
  3. CInability to access the database from more than one location
  4. DHigher upfront capital expenditure on servers

Explanation

Storing personal data with a third party raises data protection compliance and security dependence concerns, including where data is held. Scalability and multi-location access are benefits of the cloud, not risks. Cloud usually reduces rather than raises upfront capital expenditure.

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