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Regulatory Supervision, Audit, and Inspection: A Guide for Financial Institutions in Chile

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Financial institutions in Chile are subject to strict regulations and supervision by the Comisión para el Mercado Financiero (CMF). One of the key areas of focus is ensuring that these institutions comply with regulatory requirements related to outsourcing and data localization.

Data Localization

According to RAN 20-7, when financial institutions outsource services, data, technological services, or applications, they must be processed on specific processing sites. Additionally, if these services are provided abroad, the data, technological services, and applications must be located in a defined and known jurisdiction. The parties involved must also know the city where the data centers are located.

  • Amazon Web Services (AWS) provides its customers with the option to choose between several AWS Regions, allowing them to control the location of their content and servers.
  • Through AWS Artifact, customers can know the exact city within each AWS Region where data centers are located.
  • For financial institutions that require analyzing data latency and residency requirements, AWS offers Local Zones or Outposts.

Business Continuity

Obligations, guidelines, operational, and technical requirements for financial institutions regarding business continuity management are primarily found in RAN 20-7 and RAN 20-9. The main business continuity management obligations applicable to financial institutions include:

  • General management elements

  • Data processing sites and technological infrastructure

  • Systemic contingencies

  • AWS’s Business Continuity Plan (BCP) details the process followed in case of an outage, from detection to deactivation.

  • The plan has been developed to recover and reconstitute AWS using a three-phased approach: Activation and Notification Phase, Recovery Phase, and Reconstitution Phase.

Conclusion

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In conclusion, regulatory supervision, audit, and inspection play a crucial role in ensuring compliance with regulations related to outsourcing and data localization for financial institutions in Chile. AWS provides its customers with the necessary tools and infrastructure to meet these requirements, including data localization, business continuity management, and disaster recovery architectures. By understanding the requirements outlined in RAN 20-7 and RAN 20-9, financial institutions can ensure compliance and maintain a secure and reliable infrastructure for their operations.

References

  • Comisión para el Mercado Financiero (CMF). Reglamento de Normas y Acciones para la Protección de los Depositos (RAN) 20-7.
  • Comisión para el Mercado Financiero (CMF). Gesti ón de la continuidad del negocio, Cap ítulo 20-9.
  • Amazon Web Services. Best Practices for Security, Identity, & Compliance.
  • Amazon Web Services. AWS Elastic Disaster Recovery (AWS DRS).
  • Amazon Web Services. AWS CloudTrail.
  • Amazon Web Services. Amazon CloudWatch.
  • Amazon Web Services. AWS Config.
  • Amazon Web Services. Amazon GuardDuty.
  • Amazon Web Services. AWS Security Hub.
  • Amazon Web Services. AWS Config Rules.

About the Author

The author is an experienced journalist with a background in financial regulation and technology. He has written extensively on topics related to cloud computing, cybersecurity, and regulatory compliance.