Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks. Global financial institutions are becoming increasingly reliant on the cloud — using it to store customer-account data and their banking systems, leading supervisors to fret about what might happen if a bank collapses. As well as cyber risk, regulators are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks, according to people familiar with regulatory discussions.
The Bank of England is considering whether to test banks’ resilience this year, analyzing what would happen if access to the cloud were disrupted. The BoE’s Prudential Regulation Authority is also expected to publish more detailed thinking on the subject as a prelude to possible regulation. Meanwhile, the United States Office of the Comptroller of the Currency is reviewing banks’ relationships with third-party vendors, including cloud providers. EU watchdogs have also had discussions with tech companies in recent weeks, according to people familiar with the situation, and have asked to see commercial agreements with banks.