City regulators to start oversight of tech firms that provide ‘critical’ services to UK
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New powers come amid concerns that cyber-attacks and outages could put the country’s financial stability at risk. City regulators will begin cracking down in the new year on tech firms providing “critical” services to UK banks amid concerns that cyber-attacks and outages at companies such as Google or Amazon could put the country’s financial stability at risk.
From 1 January, the Bank of England and the Financial Conduct Authority will be handed powers to regulate companies that are becoming a crucial part of the day-to-day operations of the increasingly digital banking and payments sector. That includes companies that offer cloud storage, AI, and automated programmes that can help detect fraud.
It is hoped that extra oversight, which would involve compulsory reporting of major incidents and coordinated planning for emergencies, will help to avert banking blackouts. The regulators are in the process of putting together a list of companies they think are crucial to regulate. It is likely to include firms such as Amazon Web Services, which counts HSBC, Starling Bank, Nationwide, and Monzo among its clients.
Google is also likely to be in the crosshairs, as it serves companies including Revolut, NatWest, GoCardless, and Atom Bank. Microsoft shares a number of those clients and lists Investec, Virgin Money and Standard Chartered as customers. The final list is expected to be signed off by ministers by June. Once confirmed, it will mark the first time that web services arms of big tech firms come under City regulation.
