FCA Deputy CEO Calls for Stronger Regulatory Oversight on Critical Foreign Tech Firms Amid Rising Outages
Sarah Pritchard, the FCA's first deputy CEO, has advocated for a stronger regulatory grip on foreign technology firms that provide critical services to UK banks. She emphasized the need for oversight by the Prudential Regulation Authority (PRA) and the Bank of England when such firms are formally designated under the regulatory framework.
An outage at Amazon Web Services in North Virginia recently disrupted operations for over 2,000 companies, including Lloyds Banking Group and the London Stock Exchange. This incident highlighted the financial sector's growing reliance on external technology providers and raised concerns about service resilience.
Despite the expanded financial services oversight regime introduced about a year ago, aimed at regulating firms integral to digital banking and payments—including AI and fraud detection services—with mandatory incident reporting and coordinated emergency planning, the UK government has yet to designate any firm as a 'critical third party'.
Nearly a year into this regime, the Treasury has not named any company under it, prompting Pritchard to state that the system should be strengthened. She noted that regulators are prepared to supervise jointly with the PRA and the Bank of England when such designations are made.
The banking sector has experienced increasing outages as customers depend more heavily on online services, underscoring the urgency to bolster oversight and resilience measures for critical technology providers.
