UK – Digital Convergence to regulate cloud services used by banks

The report does not name any companies that may fall within the scope of the proposal, but regulators around the world are increasingly concerned about the transition from finance to cloud computing, services provided by a handful of companies, including Amazon and Microsoft. According to a Treasury report, by 2020, 65% of UK businesses will use the same four providers for cloud infrastructure services.

These proposals include allowing financial regulators to set a minimum level of stipulation that third parties “will be compelled to comply directly with any material services they provide to the UK Finance Department”. Companies are required to “participate in regression testing in multiple target formats”.

Last year, the Bank of England said it needed more powers to control the financial sector’s transition to cloud computing. Companies are moving their most important information technology systems to the cloud, allowing them to spend less on their own data centers while relying on the security and computing power of technology companies. The biggest providers are Amazon Web Services, Microsoft Azure and Google Cloud.