European regulators query Google after cloud outage disrupts banking services

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Regulators query cloud outage

Highlights

European Banking Authority contacts Google Cloud to assess the impact of Tuesday's hours-long outage on financial entities across the EU.
Revolut, Lloyds, and HSBC experience service disruptions due to a power event in Google’s europe-west2 cloud region, affecting Revolut's 13 million UK customers.
The outage is the first major test for new EU and UK regulatory frameworks requiring critical cloud providers like Google Cloud to report serious disruptions to overseers.

Regulators seek details on outage impact

As reported by Reuters, the European Banking Authority says it has been in contact with Google Cloud to gather more information on the incident, understand its implications and assess its potential effect on financial entities in the EU.

Alphabet's Google says the disruption, which lasts several hours on Tuesday, is caused by a "power event" in a London-based network serving customers across Europe. A Google spokesperson says services in its europe-west2 cloud region at a third-party facility have been restored and that the company will publish an analysis on its public status dashboard.

Revolut, Lloyds and HSBC are among the banks affected. At Revolut, which has about 13 million UK customers, services listed as affected on Tuesday include logins, card payments and cash withdrawals, according to the bank's website.

Revolut says it is reviewing the incident to limit the effect of any future third-party disruptions, adding that customer funds and data remain safe throughout. Lloyds and HSBC do not immediately respond to requests for comment.

New resilience rules face early test

The outage is the first major test of recently introduced European rules intended to strengthen the resilience of technology suppliers, including cloud providers, that underpin the financial sector.

The European Union last year designates 19 technology firms as critical third-party providers to the financial sector, placing them under joint direct oversight of three financial regulators, including the EBA, for the first time. Britain takes similar steps for four cloud providers, citing the risk that an outage at a major supplier could hit multiple financial firms at the same time, and Google Cloud falls under both frameworks.

In Britain, parliament's Treasury Committee has written to the Bank of England and the Financial Conduct Authority, seeking details of the regulators' response to Tuesday's outage, the scale of the disruption and any financial harm caused. The FCA says it is engaging with Google over the incident, and under the UK's critical third-party regime, designated providers such as Google Cloud must report serious outages to the FCA and the Bank of England.

Our earlier report on the Bank of England’s push for “bare metal” recovery planning explained why regulators want banks to be able to restore critical services even if core technology is compromised. It also highlighted warnings that AI is increasing the scale and complexity of cyber attacks, prompting supervisors to demand deeper end-to-end resilience and independent fallback options.

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