A recent outage at Google Cloud’s London data centre has highlighted ongoing vulnerabilities in the United Kingdom’s financial infrastructure tied to cloud computing services. The disruption, which occurred last week, affected a broad range of organisations relying on the American technology provider, including key public services and financial institutions.
The failure interrupted remote court hearings and caused issues with applications and websites used by NHS England and Royal Mail. Online banking services experienced significant disruptions, with Revolut reporting outages and Lloyds Banking Group and HSBC also facing operational difficulties. The incident bears similarities to a major outage at Amazon Web Services (AWS) in October 2025, exposing persistent risks in the UK’s digital financial ecosystem.
Regulators have long recognised the concentration of cloud services within a few dominant firms as a potential systemic risk. In 2019, the Bank of England publicly acknowledged these concerns, noting the dominance of a small number of cloud providers. However, regulatory progress has been gradual. It was only in 2023 that the UK government granted City regulators authority to oversee critical third-party providers serving financial firms. The Bank of England and the Financial Conduct Authority (FCA) finalized their regulatory framework for this oversight in November 2024, with the regime taking effect in early 2025.
Despite the framework’s introduction, active supervision of major cloud providers did not begin until July 2026, following the government’s designation of AWS, Google Cloud, Microsoft, and Oracle as the first critical third parties under the new rules. This regulatory expansion into technology providers has involved navigating complexities, including the international footprint of the firms involved.
FCA Chief Executive Nikhil Rathi acknowledged the rapid pace of technological change and the challenges it poses to regulatory responsiveness in a speech last week. He noted that while innovation has been transformative, the regulatory system has been slow to adapt.
Last week’s Google Cloud outage presents a preliminary test for the regulatory regime. The Financial Conduct Authority and the Bank of England are expected to use this event to assess the effectiveness of their oversight and identify areas for improvement. There has reportedly been internal frustration at the Bank regarding the quality of Google’s communication during the outage. Google responded by stating that it cooperates constructively with regulators concerning notification and transparency requirements.
The Commons Treasury Select Committee has requested detailed information from both the Bank of England and the FCA by November 4 on the outage’s financial impact and the implications for the critical third parties framework. As digital dependency deepens, the incident underscores the urgency of robust oversight of cloud infrastructure integral to the UK’s financial system.