The Bank of England warns about the risks of the cloud to financial stability

The Bank of England considers the possibility of further policy measures to mitigate the risks to national financial stability resulting from the increasing concentration of power in the hands of cloud providers globally. Without mentioning specific names, the semi-annual report refers directly to operators such as Google, Amazon and Microsoft: “Although the regulation of the operational resilience of companies in managing third-party risk has recently been strengthened, the growing dependence on a small number of operators could increase the risks to financial stability without greater regulatory oversight of the services they provide ”. With more and more banks moving critical infrastructure and services to the cloud, the central bank fears that Big Techs may have undue influence on the future stability of the financial system precisely through the cloud services they offer. In a press conference, BofE Governor Andrew Bailey said, “That concentrated power can manifest itself in the form of secrecy, opacity, not providing customers with the kind of information they need to control the risk of the service.” the central bank undoubtedly reserves particular interest in the security of cloud systems. Bailey explains: “As regulators, as people interested in financial stability, we need to have more assurance that they are achieving the levels of resilience we need.” In the same speech, Bailey announced that the Bank of England lifted the restrictions imposed during the pandemic on dividends from major lenders with immediate effect. The rapid implementation of the UK vaccination program has led to an improved economic outlook in recent months. “But the risks for the recovery remain. Households and businesses are likely to need continued support from the financial system as the economy recovers and government support measures are eased in the coming months.