When Banks Depend on the Same Cloud Infrastructure

Cloud computing supports an expanding range of banking operations, from customer-facing applications to data processing and internal technology services. As financial institutions increasingly rely on external infrastructure, shared dependencies can create operational exposures that extend beyond individual banks.

This research examines cloud concentration in the financial sector, focusing on common-provider dependencies, critical banking functions, service substitutability, switching complexity, and the potential for correlated operational disruption.

Drawing on evidence from the European Central Bank, Bank for International Settlements, Financial Stability Board, and relevant European and United Kingdom regulatory frameworks, the study distinguishes institutional resilience from sectorwide resilience.

Its central finding is that reliance on shared cloud infrastructure can create correlated operational exposure. However, provider concentration does not itself establish service failure, and potential systemic risk should not be presented as a confirmed financial crisis.