BNM Publishes Policy Document on Risk Management in Technology
BNM published a policy document that sets out its requirements for the management of technology risk by financial institutions in Malaysia. In line with the proportionality principle, larger and more complex financial institutions are expected to demonstrate risk management practices and controls that are commensurate with the increased technology risk exposure of such institutions. The policy document comes into effect on January 01, 2020.
All financial institutions shall observe minimum prescribed standards in the policy document to prevent the exploitation of weak links in interconnected networks and systems that may cause detriment to other financial institutions and the wider financial system. The control measures set out in Appendices 1 to 5 serve as a guide for sound practices in defined areas. Financial institutions should be prepared to explain the risk management practices that depart from the control measures outlined in the Appendices and to demonstrate their effectiveness in addressing the technology risk exposure.
A financial institution must ensure that the technology risk management framework is an integral part of its enterprise risk management framework. The technology risk management framework must include the following:
- Clear definition of technology risk
- Clear assignment of responsibilities for the management of technology risk at different levels and across functions, with appropriate governance and reporting arrangements
- Identification of technology risks to which the financial institution is exposed, including risks from the adoption of new or emerging technology
- Risk classification of all information assets or systems, based on the "criticality"
- Risk measurement and assessment approaches and methodologies
- Risk control and mitigation
- Continuous monitoring to timely detect and address any material risks
Related Link: Policy Document (PDF)
Effective Date: January 01, 2020
Keywords: Asia Pacific, Malaysia, Banking, Insurance, Technology Risk, Governance, Operational Risk, Proportionality, BNM
Previous Article
CFTC and JFSA Announce Comparability of Derivatives Trading VenuesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.