Many financial institutions across the pond are looking to reduce their reliance on U.S. tech providers as geopolitical tensions rise between the United States and European Union. 

“With the developments over the last, let’s say, six months, being dependent on U.S. tech providers is a consideration,” Marnix van Stiphout, chief operations officer and chief transformation officer at Amsterdam-based ING Bank, told Bank Automation News. “And as of now, there’s no alternative.” 

Many EU banks are concerned about dependence on U.S. cloud and AI providers due to recent tariffs and geopolitical tensions, Indranil Bandyopadhyay, principal analyst at consultancy Forrester, told BAN.

In May, President Donald Trump proposed tariffs of up to 50% on EU products. That was negotiated down to 15% on July 28. 

“This anxiety is driven by fears that U.S. executive orders or trade disputes could disrupt access to critical technology services and expose banks to economic and regulatory risks,” Bandyopadhyay said. 

Concerns and alternatives 

Banks and regulators have been wary of concentrated third-party risks for years, especially regarding foreign control over vital infrastructure and compliance with EU data sovereignty laws, he added. 

So the EU financial sector is moving to reduce reliance on U.S. AI technology to maintain digital sovereignty, Bandyopadhyay said. 

“In a notable development, Germany has proposed excluding major U.S. tech companies like Apple and Google from the new Financial Data Access system,” Bandyopadhyay said.  

French AI company Mistral AI is also looking to provide EU banks with an alternative to U.S. tech providers, he added. 

The EU is also implementing laws which can help banks in waning off their reliance on U.S. tech. 

The European Union agreed to the EU Data Act, which took effect on Sept. 12, establishing rules for data access and usage, according to the European Commission‘s website. 

The new rule requires cloud providers to open their ecosystems to move data between cloud providers to prevent vendors from becoming dependent on one service, according to the EC.

Sovereign tech development 

There is growing momentum among EU tech companies and governments to build cloud infrastructures that compete with U.S. giants and reduce dependence on foreign technology for critical sectors, Bandyopadhyay said. 

Initiatives such as Gaia-X, an European Commission-funded data service provider, and private sector projects like EuroStack reflect efforts to foster “tech sovereignty” through regional cloud platforms, improved compliance and resilience for sensitive applications, he added. 

EU banks are evaluating local tech providers and bringing operations in-house to mitigate risk, van Stiphout said. 

With mounting risks, banks are evaluating private cloud and hybrid cloud models to retain control over critical data, meet compliance requirements and hedge against geopolitical threats, Bandyopadhyay said.  

“Hybrid strategies combining U.S. and European providers are seen as pragmatic, improving resilience and data sovereignty while keeping access to innovations from American platforms,” he said. 

In-house tech 

The $1.1 trillion ING Bank has already deployed a multicloud strategy that aims to bring essential functions and data in-house, Marco Eijsackers, head of the chief information office at ING, previously told BAN. 

Agustin Rubini, director analyst at think tank Gartner, told BAN: “The preference for private over public clouds among financial institutions primarily stems from the heightened control over sensitive data and operations, despite the higher costs associated with maintaining a dedicated private cloud.”  

Eijsackers also told BAN that ING usually looks to develop AI tools in-house for critical processes and only teams with vendors to reduce time to market or experiment with new tools. 

“There is no one rule that fits all,” Eijsackers said. “We take decisions on a case-by-case basis but like to limit sensitive data exposure as much as possible.”