Capital One is an Amazon Web Services client, but the bank says it had few problems on Tuesday when thousands of other users of the cloud computing services experienced major disruptions to their websites and apps.
Amazon Web Services reported Tuesday high error rates with its service that companies use to manage web applications, house data and host software. Essentially, thousands of sites and apps rely on AWS and were not working or were rather slow that day.
But Capital One, which has fashioned itself as a bit of an evangelist for banks to embrace cloud computing, said its method of spreading its use of AWS across various regions was the key to its continuity.
The consent order between the Federal Reserve and Capital One required the bank to submit progress reports on its efforts to improve its risk management functions.
Michael Nagle/Bloomberg
“We experienced minor impacts that were quickly resolved due to resiliency we have in place across AWS regions,” a spokeswoman said in an email.
The AWS outage is a good reminder to banks that although cloud computing has considerable draws — better security and performance, for instance — it has the same disadvantage that so many bank systems have: the vulnerability of a relying on provider, said David Albertazzi, an analyst at Aite Group.
“Today’s event could potentially shake some financial institutions’ confidence in the public cloud as they’re contemplating what to put out there,” Albertazzi said in a statement. “They need to be selective in choosing which solutions they put on the public cloud versus private cloud. They also need to match requirements and inherent risks with the characteristics of each service and deployment models.”
The Federal Reserve withdrew expectations on crypto activity and dollar tokenization, while the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency also withdrew their versions of the guidance.
The Washington, D.C.-area bank reported a significant boost in provisions to cover emerging vulnerabilities in its $1 billion portfolio of office loans.
Tacoma, Washington-based Columbia Banking System said it will buy Pacific Premier Bancorp, accelerating its growth in Southern California by about a decade. The deal is Columbia's second major acquisition in three years.
A cohort of Democratic senators on the banking committee expressed concern over the Department of Government Efficiency's ongoing efforts to cut Federal Deposit Insurance Corp. staff and contracts, saying they worried the efforts could weaken the nation's deposit insurer and expose sensitive bank data if improperly handled.
At a New York Fintech Week event, speakers urged fintechs to better understand the criminal mindset and to use artificial intelligence to detect and thwart fraud.
Federal Reserve Bank of Cleveland President Beth Hammack said the central bank should not let fears of money-market shakiness cause it to stop balance sheet runoff too soon.
