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ACCA Strategic Professional · Strategic Business Leader · Enabling success: disruptive technologies

Orlin Bank plans to migrate its core payments processing to a public cloud provider that also hosts many of the bank's competitors. A director proposes using the same provider for backup and disaster recovery to simplify management. Applying a risk and governance perspective, what is the strongest objection?

The strongest objection is concentration risk. If primary and backup both sit with one provider, a single outage or failure could disable both, defeating resilience for critical payments. The bank should consider diversifying providers or locations and maintaining tested exit and recovery plans.

  1. AUsing one provider for both primary and backup creates a concentration risk, so a single provider failure could disable bothCorrect
  2. BCloud providers cannot offer disaster recovery services
  3. CBackup in the cloud breaches the principle of segregation of duties by definition
  4. DCompetitor presence on the platform means data will be shared automatically

Explanation

Placing primary and backup with one provider creates concentration or single-point-of-failure risk, which is critical for payments and attracts regulatory attention. Providers do offer recovery services, and shared hosting does not mean data is automatically shared because tenants are logically separated.

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