Democratic House Representatives Katie Porter and Nydia Velázquez have asked the Financial Stability Oversight Council (FSOC) to look into tighter oversight of Big Tech cloud services in the financial sector, according to a report by Reuters.
The lawmakers argue that these services have become critical to the financial system. They specifically mentioned Amazon Web Services, Microsoft Azure and Google Cloud – which make up about 57 percent of the market – saying they should be considered as critically important as payment and settlement services.
“Cloud services have become an essential element of our modern banking system and should be overseen commensurately,” the lawmakers, who both sit on the House Financial Services Committee, wrote in a letter. “Cloud services are not currently subject to an appropriate and enforced regulatory regime.”
The letter and the concern come after a huge data breach at Capital One, which highlighted the risks of banks’ data being placed in the cloud. The FSOC does not have any obligations to act on the letters, but it does show that lawmakers are increasingly concerned about the reach of these cloud services and the growing reliance on Big Tech in all aspects of digital commerce.
By law, the FSOC can mark companies whose failures would affect the financial system significantly. There are currently eight organizations marked as systemically important.
Cloud computing has been growing in popularity in recent years, and banks have been using cloud services more and more to store things like capital calculations and trading applications. Bank of America said in 2017 that it plans to move 80 percent of its tech operations onto the cloud in the next several years.