UK banks lean heavily on US cloud giants for AI, sparking stability concerns
A joint Bank of England and FCA survey shows British banks depend on three US cloud providers for most AI workloads, with limited backup plans.
Research by the Bank of England and the Financial Conduct Authority reveals that UK banks increasingly outsource AI functions to a small group of foreign cloud firms, with the three biggest US providers covering 79% of reported relationships. More than one-third of these connections are classified as essential and hard to replace, yet just 35% of institutions have rehearsed a provider change in case of disruption. Third-party AI tools constitute 53% of highly material systems, but only 24% of respondents claim deep knowledge of them, relying instead on supplier assurances.
Recent incidents such as a Google Cloud outage have heightened worries about systemic risk, prompting the Treasury Committee to press regulators for tighter oversight. Industry voices, including Rydoo CEO Sebastien Marchon, argue that clearer governance and new integration standards are needed to safely harness AI benefits.
Why it matters
Heavy reliance on foreign cloud services could expose the UK financial system to outages that threaten market stability.
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