LONDON, July 13 (Reuters) – Cloud computing providers to the financial sector can be “secretive” and action is needed to avoid reliance on a handful of outside firms becoming a threat to financial stability, the Bank of England said on Tuesday.
Banks and other financial firms are outsourcing key services to cloud computing companies like Amazon and Microsoft to improve efficiency and cut costs.
“That concentrated power on terms can manifest itself in the form of secrecy, opacity, not providing customers with the sort of information they need to monitor the risk in the service,” BoE Governor Andrew Bailey told a news conference. “We have seen some of that going on.”
Earlier the BoE’s Financial Policy Committee said additional policy measures were needed to mitigate financial stability risks in cloud computing.
“What we are going to need to see in place in terms of the standards of resilience and the testing of those standards of resilience frankly will have to roll some of that back, that secrecy that goes with it. It’s not consistent with out objectives,” Bailey said. (Reporting by Huw Jones, William Schomberg and David Milliken)