"The Amazon Web Services (AWS) outage, which has disrupted leading UK banks and global services, has once again revealed the fragility of this dependence. The incident bears striking similarities to the CrowdStrike disruption seen last year, both demonstrating how a single failure in a major technology provider can cascade across industries. For instance, customers, including myself, have been unable to log into the Lloyds Banking Group app, while widespread reports confirm disruptions across Barclays, Lloyds Bank, and the Bank of Scotland."
"Few institutions anticipated that a third party with AWS's reputation could experience a failure of such magnitude. As a result, many had not prepared or tested for an outage of this scale, or for the specific recovery steps required to restore critical services quickly. This was not merely a technical glitch; it was a crisis of trust. Customers were left wondering: Can I trust my bank? Can I trust technology itself?"
"The outage underscores the systemic concentration risk created by the world's heavy reliance on a handful of global technology providers. The financial sector, in particular, faces heightened vulnerability from this dependence, as vendors like AWS have become so deeply embedded in the global economy that their failures can disrupt millions of customers and impact critical economic functions. The event highlights the need for a strategic, coordinated response across banks, governments, and regulators to minimise the risk of future incidents."
AWS experienced an outage that disrupted leading UK banks and global services, exposing deep fragility in reliance on third-party technology providers. The failure mirrored last year's CrowdStrike disruption, showing how a single provider's breakdown can cascade across industries and prevent customers from accessing banking apps. Many institutions had not anticipated such an extensive outage from a reputable vendor and lacked tested recovery plans to restore critical services quickly. The outage became a crisis of trust for customers and revealed systemic concentration risk caused by dependence on a few global technology vendors. The situation demands stronger resilience, governance, testing, and coordinated responses among banks, regulators, and governments.
Read at London Business News | Londonlovesbusiness.com
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