(Bloomberg) -- Commerzbank AG wants Europe's banks to adopt a unified front dealing with providers of cloud services, as more move their data to such external storage centers to cut costs.
The German lender has sent out invitations to several big European banks to meet at Commerzbank's Frankfurt head office on Nov. 25, Kerem Tomak, in charge of big data at the firm, said Wednesday. Adoption of standards would mean lenders have more leverage over cloud providers and it would also ease the job of regulators who wouldn't need to vet each individual contract, he said.
Commerzbank is increasing its reliance on the cloud providers, which essentially offer giant external data storage centers and computing capabilities. It now has service contracts with Google and Microsoft as it seeks to reduce spending on hardware. But the cloud industry is dominated by a handful of large U.S. tech companies, which has raised concerns that European banks may become too dependent on them.
Three EU watchdogs said in a joint report in April the finance industry's reliance on just a few large cloud companies to store key data is an emerging threat to financial stability. Policy makers in Brussels should consider creating a new oversight system for the service, they said in the report.
Commerzbank Chief Executive Officer Martin Zielke said about a year ago that he would favor the creation of a European cloud provider as an alternative to the U.S. companies. Tomak now said that the alliance with other EU banks that Commerzbank is seeking to build is addressing the issue of over-reliance on the US firms.
Commerzbank's contracts with Microsoft and Google require those firms to keep the lender's data on servers in the EU, Tomak said. The bank's regulators have visited at least some of their data centers and generally approve of the arrangements with the firms, he said.
--With assistance from Nicholas Comfort.
To contact the reporter on this story: Steven Arons in Frankfurt at sarons@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel, Marion Dakers
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