Four major global cloud services and technology providers designated as Critical Third Parties (CTPs) by the government will sit under the auspices of the Bank of England, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
Amazon Web Services EMEA SARL, Google Cloud EMEA, Microsoft Ireland Operations, and Oracle Corporation UK have been deemed critical to many firms and their disruption or failure could potentially impact UK financial stability and services used by millions of consumers and businesses.
The three regulators will jointly oversee the CTPs under a proportionate regime, and will work together with the CTPs to address system‑level risks and reduce the risk of disruption to the services they provide spreading across the UK financial system.
The new regime will complement existing outsourcing and operational resilience rules for regulated firms who remain responsible for managing their own third-party arrangements including due diligence, risk management and contingency planning.
Sarah Breeden, deputy governor for Financial Stability at the Bank of England, said: “As critical third parties become increasingly embedded in the operations of financial institutions, they can introduce new forms of systemic risk. Our proportionate approach to overseeing these providers will ensure that these dependencies are managed in a way that safeguards financial stability.”
Katharine Braddick, deputy governor for prudential regulation and CEO of the PRA, said: “By bringing critical third parties into the scope of oversight, we are ensuring that the infrastructure underpinning UK financial services is robust enough to support UK financial stability and confidence. This directly supports the PRA’s objective to promote the safety and soundness of regulated firms.”
Nikhil Rathi, CEO at the FCA, added: “Critical third parties provide essential services which support innovation and growth. At the same time, when the same providers serve thousands of firms, a single failure can reverberate across the financial system. “Operationalising this regime strengthens our ability to tackle those risks and improve overall resilience, ensuring the UK remains a safe and attractive place to do business.”
