Bank of England to Regulate Major Tech Firms Like Amazon and Google Starting Next Week

The Bank of England (BoE) is set to begin regulating key tech companies, including Amazon and Google, starting next week. This move, announced on Friday, aims to bolster financial stability by overseeing the four main providers of cloud services to banks, which also include Oracle and Microsoft. The regulation is a response to growing concerns over the resilience of these tech firms amid rising cyber threats.

Direct Oversight of Critical Tech Firms

Under the new regulatory framework, the BoE and the Financial Conduct Authority (FCA) will have direct oversight of the local arms of these critical third-party providers. The regulators will ensure that these firms are effectively managing the risks associated with cyber-attacks and system failures that could disrupt banking services for millions of users across the UK.

According to the UK government, these firms must demonstrate their resilience by conducting regular stress tests and reporting significant incidents, including cyber-attacks and power outages, to the regulatory bodies. This measure is crucial as the technology these companies provide has become integral to daily banking operations.

Impact of Technology on Banking Services

The reliance on online technologies has significantly increased in recent years, with many banks moving away from physical branches and cash transactions. While this shift offers convenience, it also introduces new risks. For instance, a glitch in Amazon’s cloud services last October disrupted online services for over 2,000 businesses, including Lloyds Banking Group.

This incident highlighted the vulnerabilities associated with depending on a limited number of foreign firms for essential services. The Treasury committee reported that customers at major banks experienced more than a month’s worth of IT failures from 2023 to 2025.

Future Considerations for AI Regulation

Following the announcement, Meg Hillier, the chair of the Treasury committee, emphasized the need for extending regulatory oversight to AI firms in the future. Hillier stated, "To finally see movement on this after we have pressed for months... is a huge step forward." She suggested that as AI usage in financial services grows, it may be necessary to include specific AI firms under the critical third parties regime.

This proactive approach aims to mitigate risks associated with technological failures in the financial sector, ensuring that the UK’s economic infrastructure remains robust and secure against potential threats.