AWS outage highlighted over-reliance on cloud providers

Amazon Web Services (AWS) experienced an outage last Monday that saw disruptions ripple across the financial services industry. InvestmentNews gathered reflections from industry insiders after the incident

“The outage served as another reminder for how interconnected financial technology remains, amplifying the calls some see for a needed decentralised financial ecosystem,” writes InvestmentNews.

The article quotes Tyrone Ross, CEO of crypto data platform Turnqey Labs: “I think it just shows everybody how centralised the monopoly is on energy and resources in the space, whether in crypto or not. I think a lot of fintechs and providers are going to have to find a way to decentralise away from what is a monopoly on those data centres.”

Alway have plan B

Scott Lamont, managing director at wealth management consulting firm F2 Strategy told InvestmentNews that every firm should develop a business continuity plan (BCP) that”addresses both internal systems and third-party vendor exposure”.

“A strong BCP should include regular reviews of where client and internal data are stored, how they move across the technology stack, and whether secure backup and recovery mechanisms are in place. Equally important is conducting thorough vendor due diligence.”

The old ways

Dan Garrett, head of digital services at financial services consultancy Oyster Consulting said that in times of outage, firms will have to adapt their priorities so that transactions can still be carried out. “Keep client access open – even if features are degraded. Prioritise order entry, money movement, and statements; temporarily hide non-critical widgets that time out,” he told InvestmentNews.

Human fallbacks and manual solutions might become valuable in such instances. He suggested that advisors should be ready to communicate with clients over the phone to handle trade requests. “Market orders may still go through if trading pipes are reachable, but post-trade can bottleneck. With T+1, a few hours of delay can create settlement-fail risk if we don’t clear breaks quickly.”