US banks’ reliance on tech-service providers exposes them to systemic risks, study says

By Neil Roland ( August 21, 2025, 22:10 GMT | Insight) -- US banks' increasing reliance on third-party technology service providers exposes financial institutions to growing systemic vulnerability due to the absence of a comprehensive US regulatory framework, Federal Reserve regional banks said. Looking at lessons learned from a case study of a cyberattack on an unidentified provider, staffs of the Boston Fed, the Chicago Fed and the Dallas Fed found that the interconnectedness of providers is a “key source of vulnerability across the financial system.” The paper also found that risks related to providers can quickly create liquidity issues for banks that can “ripple” across the broader financial system.US banks' increasing reliance on third-party technology service providers exposes financial institutions to growing systemic vulnerability due to the absence of a comprehensive US regulatory framework, Federal Reserve regional banks said....