Regulators open review of cloud contracts after outage hits banks
Three lenders were offline for most of a morning last week
Financial regulators have opened a review of how banks contract with cloud providers, after an outage at a single data center left three lenders unable to process payments for most of a morning.
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Customers have welcomed the change. "Anything that shortens the time between order and delivery is good for us," said Amara Osei, whose distribution business employs about 120 people and works with Vantage Logistics in three regions.
The project had stalled twice before, most recently last year, when a change in leadership at Vantage Logistics put several initiatives on hold. This time, the company says, the budget is approved and the contracts are signed.
The move comes as the sector adjusts to a year of slower growth. Analysts at Ashgrove Research estimate that spending in the category rose just 3 percent in the first half, compared with 11 percent a year earlier.
What the review will examine
"The companies that will come out of this stronger are the ones that treated the slowdown as a chance to fix their cost base, not as a reason to freeze," said Amara Osei, who follows the industry for Ashgrove Research.
Executives at Vantage Logistics said the plan will be rolled out in three stages, beginning with its largest markets. A second stage, covering smaller regional units, is scheduled for the second quarter of next year.
Not every investor is convinced. Shares in Vantage Logistics slipped 2 percent after the announcement, with some analysts questioning whether the projected savings of $1.1 billion a year are achievable on the stated timeline.