UK Financial Watchdogs Handed New Powers to Regulate Tech Giants Amazon and Google

In a major regulatory shift aimed at protecting the UK economy, the Bank of England and the Financial Conduct Authority (FCA) have officially been granted direct powers to oversee global tech giants.

Starting Monday, UK financial watchdogs will have direct regulatory control over the local operations of Amazon Web Services (AWS), Google Cloud, Microsoft, and Oracle. The decision follows growing anxiety that system failures or targeted cyber-attacks at these massive cloud providers could trigger widespread financial chaos and leave everyday consumers stranded.

The four US tech titans have been designated as “critical third parties” by the UK government due to the systemic role they now play in keeping the country’s financial machinery running.

Strict New Rules for Big Tech

Under the new regime, these technology providers will no longer operate entirely outside the financial regulatory umbrella. To comply with the new rules, the firms must:

• Prove operational resilience: They will be required to run rigorous stress-testing scenarios to demonstrate how their systems handle hypothetical emergency failures and cyber-attacks.
• Mandatory incident reporting: The giants must immediately flag any major disruptions—including data breaches, power grid failures, and natural disasters—directly to the Bank of England and the FCA.

Modern banking relies heavily on these external platforms to manage everything from digital banking apps and cloud data storage to high-speed, automated fraud detection algorithms.

The Cost of Digital Dependence

The vulnerability of this highly concentrated tech infrastructure was laid bare in October last year. A technical glitch at an Amazon Web Services hub in Northern Virginia, US, disrupted online services for over 2,000 global companies—including Lloyds Banking Group in the UK.

This incident highlighted the immense risk of relying on a handful of overseas firms to keep essential domestic services online. According to data from the Treasury committee, UK bank customers endured more than a month’s worth of collective IT failures between 2023 and 2025 as the country rapidly moved away from physical branches and cash.

Delays, Politics, and the AI Horizon

While the Bank of England was granted the theoretical framework to police these firms in January 2025, the government faced criticism for taking over 18 months to finalize which tech companies would actually fall under the regime.

The delay is widely understood to have been a politically sensitive issue for Labour ministers, who have spent months trying to court foreign investment from major US technology firms. Despite the tension, all four designated tech giants publicly welcomed the announcement, stating they support the government’s push to build a more resilient financial sector.

However, some policymakers argue the rules should already go further. Meg Hillier, chair of the Treasury committee, urged ministers to prepare for the next wave of technological dependency.

“As the use of AI in financial services expands, I believe there may come a time when the government needs to consider designating specific AI firms under the critical third parties regime,” Hillier warned. “This should be monitored closely to ensure the country is not vulnerable in the event of a failure at a major provider.”

Source: Adapted from original coverage by The Guardian.