EU Targets Tech Giants to Safeguard Financial Sector Resilience

The European Union has designated 19 technology companies, including Amazon Web Services, Google Cloud, and Microsoft, as critical for its finance sector. Under the Digital Operational Resilience Act, these companies will be directly supervised to ensure they provide resilient services, safeguarding against disruptions in the banking sector.

In a bid to fortify its financial sector, the European Union has identified 19 technology firms, including Amazon Web Services, Google Cloud, and Microsoft, as critical third-party computing providers under its Digital Operational Resilience Act (DORA). This 2025 regulation allows three EU-level financial regulators to directly oversee these providers.

The move aims to mitigate risks associated with the EU's reliance on external technology providers, especially in cloud computing for banking services. A failure in services by these major tech firms could significantly impact the financial sector. The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority have named entities like IBM, London Stock Exchange Group, Orange, and Tata Consultancy Services as crucial players.

Regulators will assess these companies' risk management and governance to ensure service resilience. As European officials highlight cybersecurity and geopolitical tensions as key threats, this initiative reflects growing concerns about financial stability. The UK also plans a similar approach, with expectations of firm designations by next year.

(With inputs from agencies.)