Bank of England (BoE) to prevent tech failures
The Bank of England (BoE) has said it will set targets for banks and other financial companies to prevent and manage major IT failures
The Bank of England (BoE) has said it will set targets for banks and other financial companies to prevent and manage cyber-attacks or major IT failures.
The Financial Policy Committee, the branch of the BoE that deals with systemic risks in the UK financial system, is developing guidelines to deal with operational errors.
Deputy chief executive of the BoE’s Prudential Regulation Authority arm, Lyndon Nelson said that it will develop a discussion paper for regulators to collate their views to create a common framework for coping with cyber-attacks. It will be done under the supervision of the FPC which will ensure that financial companies develop resilience against technology threats. It is also developing supervisory tools to assess firms’ resilience against threats.
Nelson said banks have been used to safeguarding their financial interests from fraudsters and even bank robbers for decades, but in the case of operational matters the barriers to entry for those who would seek to do harm to the bank are much lower. He stressed on finding a way to manage the financial system with this vulnerability.
The statement follows a series of operational failures involving top banks and financial companies such as VISA and TSB in recent weeks. In April, the bank TSB’s new IT system crashed, prompting major difficulties in online banking and a tenfold increase in reports of “phishing” in a month. In the second case of systems failure, VISA was hit by a fault earlier this month which hampered its payment systems across Europe, preventing the processing of transactions. This led to the launch of an investigation by the Financial Conduct Authority, this month.
In response to these issues, Nelson said that PRA will expect firms to test their tolerances and demonstrate to their supervisors that they have concrete measures in place to deliver resilient services.