European banks are accelerating efforts to diversify away from American cloud providers after Iranian drone attacks struck AWS facilities in the United Arab Emirates and Bahrain in early March. The strikes caused structural damage, affected power lines, and triggered widespread outages for Gulf-region banks, exposing the vulnerability of relying on a handful of hyperscalers.

The timing is awkward for the big three — AWS, Microsoft Azure and Google Cloud — as political tensions between Washington and Europe were already mounting over President Trump's trade wars and his interest in Greenland. Banks now fear the Trump administration could pressure US cloud providers to restrict or cut off services to European lenders. While no such restrictions have been imposed, the possibility alone has lenders spooked.

Colin Kerr from research group Celent noted the attacks will vindicate those warning about banking services concentrated among hyperscalers. Unite Global reports almost 50 banks have approached the company seeking alternatives over the past 12 months. However, banks are not rushing to replace US providers outright — most still view them as essential due to superior cybersecurity and disaster recovery capabilities.

Instead, lenders are adding secondary providers alongside their existing US cloud relationships. As one executive put it, the lens has shifted from cost and scalability to control, jurisdictional exposure, and the ability to operate under stress scenarios.