EU Identifies Amazon and Google as ‘Essential’ Tech Providers for Financial Sector
We independently review everything we recommend. When you buy through our links, we may earn a commission which is paid directly to our Australia-based writers, editors, and support staff. Thank you for your support!
Quick Read
- EU has designated 19 tech firms as essential for its finance sector.
- Amazon Web Services, Google Cloud, and Microsoft are included in this designation.
- The Digital Operational Resilience Act (DORA) is now in force.
- It aims to safeguard the finance industry against tech failures and disruptions.
- The UK is contemplating a similar regulatory framework.
Understanding DORA and Its Consequences
The European Union’s Digital Operational Resilience Act (DORA) took effect in January 2025, focusing on strengthening the bloc’s financial sector against possible technological disruptions. According to DORA, three principal EU financial regulators will supervise tech firms categorized as critical.
Designated Key Tech Providers
Included among the 19 firms classified as critical are the European divisions of Amazon Web Services, Google Cloud, Microsoft, IBM, and others. This initiative is intended to diminish risks that may emerge from a significant tech provider suffering outages.
Responses from the Tech Giants
Leaders in the industry have reacted favorably to this classification. Google Cloud and LSEG have voiced their support, while Microsoft and Amazon Web Services pledged to comply with European cybersecurity regulations.
Concerns Regarding Financial Sector Resilience
Officials in Europe have heightened worries regarding the resilience of their financial systems, citing concerns such as geopolitical tensions and tech disruptions. This has led to regulatory measures aimed at ensuring stability.
UK’s Parallel Efforts
The UK is investigating a similar regulatory system but has not yet designated any companies. UK regulators have updated the finance ministry, with designations anticipated by the following year.
Summary
The EU’s choice to label certain tech companies as critical under DORA represents a significant advancement towards protecting its financial sector. This initiative highlights rising apprehensions over technological dependencies and intends to bolster the resilience of vital financial services.
Q&A
Q: What does DORA stand for?
A: DORA refers to the Digital Operational Resilience Act, an EU regulation to guarantee resilience in the financial sector against tech disruptions.
Q: Which companies are impacted by this designation?
A: Firms such as Amazon Web Services, Google Cloud, Microsoft, IBM, and others have been identified as critical providers.
Q: Why has the EU enacted these regulations?
A: The EU seeks to shield its financial sector from risks linked to reliance on external tech providers.
Q: How have the companies reacted?
A: Most firms have embraced the designation and are dedicated to adhering to the newly established rules.
Q: Is the UK introducing similar regulations?
A: Yes, the UK is evaluating a similar strategy, with expectations for designations by the next year.
Q: What risks could arise if a tech provider experiences an outage?
A: An outage could disrupt crucial banking services, jeopardizing financial stability across the EU.
