The cooperation between British banks and large US cloud providers raises concerns.
- Beeks CEO Gordon McArthur criticizes banks for partnering with potential rivals.
- Collaboration with US giants might be risky for Britain’s financial infrastructure.
- Beeks reports a significant revenue increase amidst growing cloud service contracts.
- The UK’s cloud market faces scrutiny from competition regulators.
The growing trend of British banks and fintech companies partnering with major US cloud providers has come under scrutiny. Gordon McArthur, CEO of the cloud firm Beeks, expressed his concerns about this collaboration, labeling it as ‘bizarre’. McArthur questioned the wisdom of banks providing their data and infrastructure to firms that have declared ambitions to offer financial services themselves. He noted, ‘I find it quite bizarre that the banks are willing to give their data and infrastructure to three of the most aggressive commercial organizations in the world [that have] all said they want their own financial services businesses.’ This dependence on US tech giants, according to McArthur, represents a ‘very dangerous game’ due to the potential risk of creating single points of failure in the digital economy.
Beeks has reported a 27% increase in sales amounting to £28.5 million for the year ending in June, attributed to winning several new cloud service contracts, including one with a major UK bank. The company’s pre-tax profits saw a remarkable 68% rise to £3.9 million, with stock prices increasing by 6% to 270p and the value more than doubling since the start of the year. This financial success is partially driven by ‘material growth’ in their sales pipeline, particularly with significant international exchanges.
In parallel, the UK’s cloud market is undergoing investigation by the Competition and Markets Authority (CMA) amid allegations of anti-competitive practices by leading cloud companies. The CMA has extended the deadline for its investigation report to August 2025, allowing for a more thorough analysis of the market’s complexities. Part of the evidence includes a strong critique from Google against Microsoft, accusing them of limiting customer choice through restrictive software licensing practices. Google asserts that these actions by Microsoft ‘risk irreversibly tilting the market in Microsoft’s favor at a pivotal moment,’ necessitating ‘urgent and timely action.’ Meanwhile, Microsoft maintains that the market is ‘highly dynamic and rapidly evolving,’ suggesting the CMA’s views may not reflect market realities.
McArthur remains skeptical about the outcome of the CMA’s investigation, citing the substantial lobbying power wielded by major tech firms. He remarked, ‘These big guys have got so much lobbying cash…so I do think it’ll be a bit toothless to be honest.’
The ongoing debate highlights the complex dynamics between financial institutions and cloud service providers in the UK market.
