The business with the cloud is firmly in the hands of U.S. companies. In Europe, some governments have voiced their concern about the dependence on the U.S., while Swiss banks are finding their own way to safeguard data.
A survey by «Bloomberg» (behind paywall) is making plain that banks which are relying on the cloud have few options but to choose a U.S. provider.
Amazon Web Services is the global market leader. Microsoft’s Azure cloud is the dominant force in European banking, with both Swiss giants using that service. Behind the two big players, both Google and IBM have strong contenders.
Political Pressure in Europe
European firms have made little inroad in this particular business. The project developed by SIX for instance never took off, while Inventx focused on smaller banks and insurers.
Big European banks are clearly concerned about being dependent on big U.S. tech firms, and the governments of France and Germany now aim to get the telecommunications, tech and finance companies of Europe to develop a competitor worth its name.
Right to See It All
Meanwhile, Commerzbank has joined other European banks in trying to build an alliance that would achieve a better position to negotiate with the Americans. Their activism is a consequence of concern about arbitrary decisions by the U.S.
The authorities of the U.S. have the right to access all data stored at clouds provided by U.S. firms, based on its Cloud Act. In a worst-case scenario, the government can even decide to shut down the service unilaterally.
Preventive Measures by UBS
The concern among European firms has prompted Microsoft to provide Swiss clients with a service from local data centers operated by a Swiss unit. UBS has encrypted the client data on the cloud to such an extent that the U.S. authorities would need the help of the bank to decipher its content.
European regulators have urged the domestic banks to save their data locally, but hasn’t issued a binding rule to that extent.
Short on Investment Capital
The European lobby will probably have to make do with local server farms, because the banking industry hasn’t got the necessary capital to invest the billions required to compete with the U.S. giant tech firms.
