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In the digital age, businesses increasingly rely on third-party service providers to manage critical operations. However, the question of data access in these relationships is paramount, especially in light of potential disruptions or exit scenarios.

When working with service providers who use third-party platforms, contracts should clearly outline the commitments, contingency arrangements, and the possibility of direct contracts with the platform provider. This is crucial to ensure uninterrupted access to data in case of service disruptions.

Most Software as a Service (SaaS) contracts allow for data extraction upon termination or for a short period after termination. However, these timeframes may not be sufficient for making alternative arrangements in case of an unplanned exit. To mitigate this risk, businesses could consider implementing escrow arrangements, which ensure access to data in the absence of the service provider.

Traditional escrow arrangements focus on ensuring ongoing use of business-critical systems, but newer models offer access to data as well. Two common cloud escrow models are the "access" model and the "replicate" model. The access model involves depositing access credentials to the existing environment, while the replicate model sets up a mirrored instance of the cloud-based software.

The replicate model, managed by the escrow provider, requires regular updating of the code and data in the replicated instance. On the other hand, the access model may not be suitable in a multi-tenanted environment or carry the risk of the service provider changing the credentials or problems with the underlying environment.

Regulatory requirements for financial entities often include appropriate business continuity and exit planning provisions related to data access from service providers. For instance, the UAE Central Bank, the UK's Prudential Regulation Authority (PRA), and the European Digital Operational Resilience Act (DORA) mandate that financial entities ensure access to data held by their service providers.

In Europe, companies obligated under DORA must include clauses in their contracts for ICT services ensuring access, recovery, and return of personal and non-personal data in the event of insolvency, resolution, business discontinuation of the ICT provider, or contract termination. This is to guarantee digital operational resilience for banks, insurance companies, and investment firms.

In a SaaS arrangement, customer personnel should have continuous access to data during the term, with high platform availability commitments and strong support service levels. Effective provisions ensuring access, recovery, and return of data need to address stressed exit scenarios.

In scenarios involving service providers, the ability to access data is critical for business continuity and exit planning. Businesses critically impacted by the loss of access to data on a cloud-based platform may wish to investigate escrow as a potential mitigation strategy. If a business cannot access its data from a service provider, it may face substantial additional and unanticipated costs.

In conclusion, cloud escrow could be a valuable tool in ensuring data access in stressed exits from a service provider, even where the customer does not require long-term access to the platform itself. By understanding the benefits and limitations of various escrow models, businesses can better protect their critical data and maintain business continuity in the face of service disruptions.