TOGETHER WITH...

In today's email, we've got:

• banks starting to use the cloud

• the Big Four poaching each other's staff

• the most common law firm application pitfalls

EDITOR'S RAMBLE 🗣

Usually, in this section, I like to give a little update on any interesting stuff I've been up to since I last wrote the newsletter (in case you guys are interested)!

This time, not so much to report...

I've had a very busy couple of weeks at work (probably the busiest I've ever been).

Newly qualified associate life is one of more responsibility (woohoo), but also more responsibility (oh no).

I thought I'd share as I think transparency about this career is important.

So, while it's been a tough few weeks, I'm looking at the positives.

Hopefully one positive is that we've got a great newsletter here for you! 

- Idin

FEATURED REPORT 📰

🌥 Banking on the cloud

Credit: Giphy

What's going on here?

Financial institutions have never been big users of cloud storage for their data, but that’s changing now.

What does this mean?

The ‘cloud’ refers to servers that are accessed on the internet (instead of running from a physical computer). Storing something on the cloud as opposed to an ‘on-site’ server can be compared with you storing your files on a Google Drive as opposed to saving them locally on your computer.

Banks never liked using the cloud before, but they’re warming to the idea!

Why didn’t they like it?

Financial institutions (like banks) and financial regulators (like the FCA in the UK) don’t like taking risks. That’s understandable, really, as these companies are holding onto super confidential information (like bank balances, names, addresses, copies of IDs etc.).

There are a few key reasons they don’t like the cloud, such as:

1. Limited network visibility: You might not know what’s going on ‘behind the scenes’ of your third-party cloud provider.

2. Regulatory compliance: When you are regulated by an entity like the FCA, you’re responsible for your supply chain also being compliant with the rules they set - this includes any third parties you use (like cloud providers). You have to be sure they’re acting within the rules or risk getting in trouble.

3. Data access concerns: As you put your trust into a third-party cloud provider, you will not have complete visibility over control of who has access to the data.

In a word, it’s the uncertainty that they didn't vibe with.

What's changed?

The biggest change is that regulators (like the FCA in the UK) are now more comfortable letting banks store data on the cloud and have even provided guidance on the safe way to use this technology.

Cloud providers have also become more mature. The ones that are trying to win big business from banks have engaged with regulators and levelled up their service to reach the standards required for financial institutions to remain compliant.

Why did regulators change their mind?

Regulators are under pressure to ‘get with the times’ and let banks live more on the internet. Since the Covid-19 pandemic, this pressure has only increased. You’ll probably know that lot of challenger banks (like Revolut, Tide, and Monzo) only exist online, with no physical branches.

Being online also makes financial institution more resilient - which the regulators see as a really important characteristic. You can’t have something as important as banks not being accessible for any reason. Becoming cloud-based helps improve this.

Is being on the cloud actually better?

There are real benefits of being a cloud-based financial institution.

1. Cost: It can be cheaper than the alternative. Installing physical IT hardware is expensive to build and maintain. With the cloud, you can avoid all this and have no huge upfront costs.

2. Flexibility: It’s more flexible because with cloud agreements, you tend to pay for whatever you use. You’ll also be charged a lot if you use the service a lot and less if you use it less.

3. Security: Despite what many people think, the cloud is secure. Traditionally, cloud solutions were perceived as risky because you didn’t know where your data was or who controlled it. But actually, the most common way personal data is compromised is through attacks on a system’s particular workstation (like a computer on a network). But with the cloud, your data is segmented from your IT system. So, if one of your bank staff opens a suspicious email and gets hacked, it’s not a big deal because the personal data is somewhere else entirely.

What not so great about it?

Until the law gets more comfortable with the tech, there are still legal and regulatory hurdles to overcome.

The FCA says that firms should have a “clear and documented business case or rationale” to justify outsourcing important things to the cloud.

Financial institutions have to comply with the (sometimes difficult) requirements of the regulators. For example, they have to have physical access to the cloud provider’s business premises to monitor how they work, which is probably a lot of effort for both he bank and the cloud company.

Banks must also keep a close eye on their contracts with any cloud providers and make sure that their cloud provider’s business operations are also compliant with the regulator’s requirements.

Where are we going next?

With the benefits that come with being cloud-based, banks and financial institutions will start to feel a bit of FOMO if they don’t make that jump. The regulators getting used to the idea also really helps. Cloud service providers are getting more familiar with the requirements and those that are aimed at selling to big banks are making sure they meet the regulator’s standards.

So, the forecast is certain: the cloud is here to stay.

TOGETHER WITH THE LAWYER SPOT 🤝

Commercial awareness never looked so 🔥

It's application season. Which means it's commercial awareness season.

But that doesn't mean you've got to passively just "read the FT and BBC News".

Instead, you'll learn much better if you actively create something.

Together with The Lawyer Spot, we've released the notebook you need to shake off your commercial unawareness.

This notebook has got:

1. the quality of The Lawyer Spot's stationery,

2. the frameworks of LittleLaw's commercial reports, and

3. the ability to make improving your commercial awareness (ergh) an actual delight (wow).

A BIT OF FUN 😄

Name the skyline

Commercial awareness is international...

Can you name the city shown in the photo below?

Credit: The Star

Scroll down to the bottom to see if you were right. 👀

IN OTHER NEWS 🗞

• ✅ Barristers to vote on ending strike action: Barristers began striking because the system of legal aid, which makes up the bulk of their pay, had resulted in huge cuts to their income. Now, after a new pay offer was received from the government, they will take a vote on whether to end the strike.

• 💰 Kim Kardashian must pay $1.26m to settle crypto 'pump and dump' charges: Kim Kardashian was paid $250,000 to promote a crypto token on Instagram and didn’t properly disclose that her post was an advert. To settle the claim by the Securities and Exchange Commission (the financial regulator in the US), she has agreed to pay $1.26m. The post had the text “#ad” on it, but this wasn’t considered to be clear enough. This shows how crypto is being regulated when advertised to the public because of its volatility.

• 👀 PwC eyes up EY with a plan to poach its staff because of EY’s split: EY’s chosen to separate its accounting and consultancy arms. Its rival and fellow ‘Big Four’ member PwC is using this opportunity to lure away senior people who don’t thing splitting up is the right move. This is a good example of different business strategies and how major changes in any company will result in staff being unhappy and moving elsewhere.

AROUND THE WEB 🌐

• 👀 Discussion: The awesome team at TCLA created a resource of the most common law firm application pitfalls

• 😬 Destress: Release some stress by popping some bubbles

• 🗞 Useless: McDonald’s is releasing new Happy Meals for adults (but only in the US)

Credit: TCLA Forum; r/nottheonion

Quiz Answer: Toronto