(Reuters) — Officials at the U.S. Treasury Department are urging the financial sector to address potential challenges in using cloud services, warning in a report released on Wednesday that failure to do so could leave them and their clients vulnerable.
The risk is particularly acute for small and medium-sized financial institutions, the department said.
Deputy Finance Minister Wally Adeyemo said that while “there is no doubt that providing consumers with secure and reliable financial services means greater demand for cloud-based technology”, there needed to be “safe and efficient migration” as banks and other financial firms 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 undermine 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 shortage of technology workers who can help financial institutions deploy cloud services, department officials said.
The department is setting up a task force to address the challenges raised in the report and said it would work with US financial regulators, industry and international partners to address the risks.
Technology companies that provide cloud services include Amazon Inc.’s Amazon Web Services, Alphabet Inc.’s Google, Microsoft Corp. and Oracle Corp.