The Federal Reserve conducted a formal examination of an Amazon Web Services data center in Virginia, the Wall Street Journal reports.
It does not appear that the examination was due to any specific incident or concern about AWS, but rather due to the company's increasing dominance of the cloud computing market, with customers that include a large percentage of the financial sector.
The examination is not related to the Capital One hack, which the Fed was only made aware of last week. In that case, a former AWS employee was charged with stealing personal information of more than 100 million Capital One card customers and applicants. Capital One is an AWS customer, but has said that the data was not accessed through a vulnerability in AWS systems.
A question of power
The Federal Reserve’s Richmond branch visited the data center in April, WSJ reports. They were allowed to review certain documents on Amazon laptops, but not able to take anything out of the facility.
The examiners focused on Amazon’s resiliency and backup systems, with the visit expected to be the first of many as the Fed turns its attention to cloud companies.
After the meeting, the agency asked for more documents and information from Amazon, but the company reportedly appeared wary, demanding information on how its data would be stored and used, and who would have access and for how long.
AWS is used by a large number of banking and financial enterprises, including Goldman Sachs, Nasdaq and payments company Stripe - as well as, of course, Capital One. Rival cloud service Azure serves companies including JPMorgan Chase, Bank of America and TD Bank.
Like many large enterprises, financial companies have multicloud and hybrid cloud architectures, deploying across several cloud providers, and through their own data centers. Earlier this year, an outage at a Wells Fargo data center meant that customers could not access ATMs, or their online and mobile banking accounts.
It is not clear how much oversight the Fed would have over cloud companies. A US Treasury report last year noted that bank regulations had not “sufficiently modernized to accommodate cloud and other innovative technologies.”
But the increased focus on AWS comes as US regulatory bodies have ramped up inquiries into tech giants. The Federal Trade Commission is investigating Facebook, while the Department of Justice is investigating Alphabet - both for possible antitrust violations. The FTC is believed to be scrutinizing Amazon.
Some Presidential candidates have called for more aggressive action, notably Senator Elizabeth Warren. In a Medium post, she said: "My administration will make big, structural changes to the tech sector to promote more competition - including breaking up Amazon, Facebook, and Google."
