The Bank of England and the Financial Conduct Authority will take on direct oversight of major technology providers such as Amazon, Google, Oracle and Microsoft from next week, aiming to ensure their services to banks are resilient against cyber-attacks and outages.
Key facts
- The Bank of England has been handed powers to regulate key tech firms from Monday.
- Firms in scope include Amazon, Google, Oracle and Microsoft.
- The Bank and the Financial Conduct Authority (FCA) will jointly oversee four large-scale cloud and tech providers to banks.
- The move addresses fears that system failures could threaten financial stability and harm consumers.
- The aim is to ensure resilient cyber-defences and reduce the risk of major outages affecting millions.
The Bank of England has been handed new powers to regulate important technology firms, including Amazon and Google, amid fears that system failures could threaten financial stability and harm consumers, according to the Guardian.
From Monday, the Bank and fellow City regulator the Financial Conduct Authority (FCA) will be in charge of ensuring that four large-scale providers of cloud and technology services to banks are resilient and actively reducing the risk of cyber-attacks and major outages.
The oversight targets what the Guardian describes as ‘critical third parties’, a group that also includes Oracle and Microsoft. These companies provide the underlying cloud and technology infrastructure that banks increasingly rely on to run their services.
The concern driving the change is that a failure at one of these providers could disrupt services for millions of people and businesses across the UK. By bringing the firms under direct regulatory oversight, the authorities aim to safeguard the wider UK economy.
Under the new arrangement, regulators will focus on ensuring these providers maintain resilient cyber-defences and take active steps to reduce the risk of outages that could ripple through the financial system.
The Guardian reports that the powers come into force next week, marking a significant expansion of the Bank of England’s and the FCA’s remit into the technology sector.
Why it matters
Banks and financial firms increasingly depend on a handful of large cloud and technology providers, so a single major failure could disrupt services for millions of customers. Bringing these firms under direct regulatory oversight is intended to strengthen the resilience of the UK financial system and protect consumers and the wider economy.
Frequently asked questions
Which tech firms will the Bank of England regulate?
According to the Guardian, the firms include Amazon, Google, Oracle and Microsoft, described as 'critical third parties' providing cloud and tech services to banks.
When do the new powers take effect?
The powers come into force from Monday, next week, according to the Guardian.
Why are these firms being regulated?
The move addresses fears that system failures or cyber-attacks at these providers could threaten financial stability, disrupt services for millions, and harm consumers and the UK economy.