By adopting cloud computing technology to make their systems accessible from multiple locations, financial services companies are launching new, improved digital products and streamlining their operations. But, at the same time, cyber specialists are warning that this cloud migration is exposing companies to a greater risk of cyber attacks and data breaches — as well as the fines and reputational damage they can bring.
In July, the Bank for International Settlements said that the financial sector’s increased reliance on cloud computing was “forming single points of failure” and “creating new forms of concentration risk at the technology services level”.
This was a reference to the fact that the vast majority of financial institutions use cloud computing services from the same major providers. Bank of England research in 2020 found that more than 65 per cent of UK-based banks and insurers relied on just four cloud services.