"WASHINGTON -- The Treasury Department is warning about potential vulnerabilities caused by financial institutions relying on a small number of providers for cloud-computing services.
The Treasury said in a report Wednesday that banks and other financial institutions are increasingly using remote computing services known as the cloud, part of a broader shift in how businesses manage their technology needs. Many are using these services for software such as email, and a smaller number are relying on it for more sensitive infrastructure such as data storage.
The report says that many financial institutions buy cloud-computing services from a small number of businesses, particularly Amazon.com Inc., Microsoft Corp. and Alphabet Inc.'s Google. That means a technical breakdown or cyberattack on one of those companies could have broad consequences for the financial-services sector.
Cloud services can help businesses protect themselves from many kinds of common cyberattacks, according to cybersecurity experts, but they also present some risk-management challenges because a successful compromise of one service can jeopardize many customers. Chinese intelligence agencies are among those accused of ransacking U.S. firms by hacking into cloud-service providers.
A Google spokeswoman said the company's services were often more secure than traditional information technology.
In a 2020 white paper, Microsoft said that the cloud industry wasn't as concentrated as other industries and that its cloud services were secure.
Financial regulators are expected to discuss the report at a meeting this week of the Financial Stability Oversight Council, which Treasury Secretary Janet Yellen leads. The Treasury is also forming a separate group to study concentration in cloud-computing services." [1]
1. U.S. News: Treasury Warns of Risk From Banks' Use Of Cloud
Duehren, Andrew. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 09 Feb 2023: A.6.
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