news/AMZN/2023.02.08/U.S. Treasury urges financial firms to examine cloud services.txt

WASHINGTON, Feb 8 (Reuters) - U.S. Treasury Department
officials highlighted several challenges facing financial firms
that are increasingly turning to cloud computing services to
support a range of their activities, warning in a report on
Wednesday that failure to address them could leave lingering
vulnerabilities.The risk was particularly acute for small and medium-sized
financial institutions, the department said.Deputy Secretary of the Treasury Wally Adeyemo said while
"there is no question that providing consumers with secure and
reliable financial services means greater demand for cloud-based
technologies,” there needed to be "safe and effective migration"
as banks and other financial companies adopt cloud services."Treasury found that cloud services could help financial
institutions become more resilient and secure, but that there
were some significant challenges that could detract from these
benefits," department officials wrote in their report assessing
current cloud adoption in the financial industry.Those issues include financial firms' exposure to potential
cyber incidents, an industry-wide reliance on a small number of
cloud providers and a lack of technology workers able to help
financial institutions deploy cloud services, among other
challenges, department officials said.The report also noted that the patchwork global rules made
it "nearly impossible" for larger firms to consistently adopt
cloud systems globally.For example, financial firms and cloud service providers
in the European Union are facing stricter rules, and will need
to show how quickly they could recover from a cyber attack under
a law due to take effect at the end of 2024.Treasury officials recommended steps that could help the
sector adopt cloud computing, adding that it "neither endorses
nor discourages cloud service adoption by the sector."The banking industry was generally supportive of the report.
The Bank Policy Institute, which represents larger banks, said
in a statement it welcomed collaboration with government
officials on bolstering cloud adoption and addressing risks.The department was establishing a working group to address
the challenges raised in the report and said it would work with
U.S. financial regulators, the industry and international
partners to address the risks.Technology companies that provide cloud computing services
include Amazon Inc's Amazon Web Services, Alphabet
Inc's Google, Microsoft Corp and Oracle Corp
.
(Reporting by Susan Heavey and Pete Schroeder
Editing by Bernadette Baum and Marguerita Choy)