International business network with connected lines, worldwide communication for internet of things, finance, trading, blockchain and web technologies, concept wit businessman using tablet computer (International business network with connected lines,

The adoption of cloud computing is generating benefits for U.S. broker-dealers, but the shift comes with challenges and added regulatory concerns too, according to a new report.

The U.S. Financial Industry Regulatory Authority Inc. (FINRA) published a report detailing the results of a review of the industry’s experience with cloud computing.

The report found that the technology “is transforming how broker-dealers operate, with the potential to enhance agility, efficiency, resiliency and security within firms’ operations.”

For instance, it found that cloud-based productivity and collaboration tools have proved useful for firms, particularly amid the shift to remote working; that cloud-based applications enhance firms’ ability to quickly launch products and to innovate; and that there are potential cost savings.

At the same time, firms report a variety of challenges, including staffing, security and cultural obstacles to capitalizing on the advantages presented by a cloud-based platform, such as “viewing technology use as a variable expense instead of a fixed capital cost and taking advantage of the ability to scale up and down quickly to innovate.”

Additionally, firms are concerned about being locked in to a cloud provider, creating a new vulnerability.

“Many firms are seeking to explore how these technologies can be used to personalize customer experiences, analyze larger amounts of data faster and increase their competitiveness in areas of rapid innovation,” said Haimera Workie, head of the office of financial innovation and senior director at FINRA, in a release

“As adoption of the cloud continues to grow, firms are finding clear benefits, but also potential challenges,” Workie added. “We encourage broker-dealers to conduct their own assessments of the implications of cloud computing, based on their business models and related use cases, and share those learnings with us.”

The report also detailed the possible regulatory implications of the shift to cloud computing.

“Factors for market participants to consider when seeking to adopt a cloud environment include cybersecurity, data governance, outsourcing/vendor management, business continuity, and recordkeeping,” it said.

In light of the review, FINRA is also seeking comment on potential changes to its rules or guidance “to support cloud adoption while maintaining investor protection and market integrity.”

The deadline for providing feedback is Oct. 16.