BigTech providers of cloud services to UK banks may now have to undergo resilience testing to ensure they meet minimum standards according to a senior Bank of England (BOE) official.
Victoria Saporta, executive director for prudential supervision at the BoE, called maintaining the continuity of the cloud services banks rely on "a big topic both within the UK and internationally".
Saporta recommended a “global approach” to maintaining the resilience of cloud services at an event held by the Institute of International Finance reported by Reuters.
The news comes after the Bank of England said in a July report that increasing reliance on a small number of cloud service providers (CSPs) could “increase financial stability risks” without greater regulatory oversight.
The Financial Policy Committee (FPC) has previously highlighted that the market for cloud services is highly concentrated among a few CSPs, which could pose a threat to financial stability.
Cloud migration has strong support within the banking community internationally; JP Morgan chief executive Jamie Dimon has highlighted a reliance on legacy systems as a weakness for banks, which he said need to be moved to the cloud if they are to ‘remain competitive’ in his annual letter to shareholders in April.
The public cloud services market is highly concentrated between a small number of providers; last month Andrew Bartels, vice president and principal analyst at Forrester put Amazon’s share of the market at 56 per cent, with Microsoft Azure having a 33 per cent share, and Google Cloud having a 15 per cent share.
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