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UK-based regulator to increase oversight on cloud banking giants

Tuesday 11 January 2022 11:12 CET | News

The Prudential Regulation Authority has reportedly decided to take a closer look on Amazon, Microsoft, and Google, according to AltFi.Concerns are growing that an Amazon Web Services (AWS) outage could one day take down more than just Netflix and Facebook. According to a report in the Financial Times, the Bank of England’s Prudential Regulation Authority is looking at ways of assessing the ‘operational resilience’ of cloud computing giants that have been edging their way into the financial services sector.

Of the UK challenger banks, Monzo and Starling are both held up as case studies by AWS, while Revolut is using Google Cloud for its cloud banking services. Microsoft Azure also has a growing number of financial services customers. Reliance on these tech giants is even more acute further down the stack, with cloud banking providers like Thought Machine and Mambu relying on AWS for their services, which are in turn used by dozens of smaller fintechs.
The PRA has been engaging with banks and other regulated firms on their use of cloud-based services for several years.
In a meeting of the Bank of England’s Financial Policy Committee from September 2021, it was noted: ‘the increasing criticality of the services that [cloud service providers] provided to UK financial firms, and the fact that the provision of these services was often concentrated in a small number of third parties, which were very difficult to substitute, posed a threat to UK financial stability in the absence of greater direct regulatory oversight’.
Back in the day, the regulator would have tested banks’ data centres against cyberattacks or technical faults, but it’s not yet clear how this works when the majority of UK banking is passing through the data centres of just three providers.
The PRA declined to comment when reached out by AltFi.
More: Link


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Keywords: regulation, Bank of England, Amazon, Microsoft, cloud services
Categories: Fraud & Financial Crime
Companies: AltFi, Amazon, Google, Microsoft, Prudential Regulation Authority
Countries: United Kingdom
This article is part of category

Fraud & Financial Crime

AltFi

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Amazon

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Microsoft

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Prudential Regulation Authority

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