FSB Examines Cloud Concentration in Financial Services
22 October 2019: The International Financial Stability Board (FSB) is reportedly examining ‘cloud’ services provided to banks, including industry leaders such as Amazon and Microsoft.
Governor of the US Federal Reserve, Lael Brainard, has suggested that the FSB could be concerned about the concentration of these providers and whether banks have sufficient “fail-over” options in place to move to a second system if the first one collapses.
The reliance of banks on third-party cloud providers is on the rise, with Amazon Web Services, Microsoft Azure and Alphabet’s Google Cloud accountable for 57% of the overall cloud market. Banks are turning to cloud services to facilitate data storage and to enhance computational capacity, however some have raised concerns that the practice could create as many issues as it resolves.
Brainard added that institutions need to be held to account and must make risk assessments “in a very well-informed way and be taking that migration seriously.”