Cloud Sourcing and Mitigating Concentration Risk in Financial Services

Daniel Gozman (), Tim Machaiah and Leslie Willcocks ()
Additional contact information
Daniel Gozman: University of Sydney
Tim Machaiah: Henley Business School
Leslie Willcocks: The London School of Economics and Political Science

A chapter in Information Systems Outsourcing, 2020, pp 335-358 from Springer

Abstract: Abstract With the increased adoption of cloud services, the resilience of cloud providers is paramount to not only the firm, but also to the stability of the financial sector. Method: We use a “mixed” method of research by using a combination of data ranging from the UK regulator regulatory data and information from the public domain, supported by interviews with technology risk specialists at the FCA. Conclusion: This research acknowledges the strategic role of information systems and recognises the key advantages that cloud providers can bring to financial firms. Most firms are keen to leverage these benefits, by adopting “cloud” into their future IT strategy. However, we find that this may lead to increased reliance on key service providers, thus leading to concentration risk. We also find that lack of supplier due-diligence and interoperability standards between providers can be significant contributors to this risk. This research then arrives at three aspects—availability concerns, cyber-attacks and contractual issues, which could constrain the ability of service providers to provision contracted services—that could potentially cause detrimental effects across the financial sector. Before concluding, we look at factors that could mitigate this risk and the increasing role of regulators, firms and service providers in this endeavour.

Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:prochp:978-3-030-45819-5_14

Ordering information: This item can be ordered from
http://www.springer.com/9783030458195

DOI: 10.1007/978-3-030-45819-5_14

Access Statistics for this chapter

More chapters in Progress in IS from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().