Reuters, 21 April 2021
The Bank of England might strengthen its controls on cloud data providers and other technology firms to counter possible risks to the stability of the financial system from the rise of fintech, Deputy Governor Dave Ramsden said.
The Bank of England (BoE) has expressed concerns before about the reliance by financial firms, especially fintech startups, on third-party technology companies for key parts of their operations, and Ramsden said this scrutiny would intensify.
“We plan to analyse further whether we need even stronger tools to manage the risk that critical third parties, including potentially cloud and other major tech providers, may pose to the Bank’s … objectives,” Ramsden told the Innovate Finance conference on Wednesday.
Regulators globally have been tightening scrutiny of outsourced functions as they worry that core services financial firms provide to customers are vulnerable to outages at third parties.
Britain’s government is keen to promote fintech as an area of growth and hopes that nimbler regulation will enable it to steal a march over the European Union, where British financial firms now have reduced access due to Brexit. read more
The BoE has said it will not water down regulatory standards, but does see scope for more streamlined regulation of smaller banks and in some areas of insurance.