HKMA issued a revised version of the Supervisory Policy Manual module TM-E-1 on risk management of electronic banking (e-banking). This module sets out guidance on the sound risk management principles and practices applicable to authorized institutions’ e-banking services. The guidance took into account the latest developments in banking industry, in relevant technologies, and in supervisory guidance used in other major jurisdictions. The guidance is intended to facilitate further development of e-banking in Hong Kong while enhancing the risk management controls of the industry.
Given that e-banking involves the delivery of financial services through technological means, both general risk management principles applicable to the provision of the underlying financial services and the typical technological controls are applicable to e-banking. This module does not repeat the general guidance of HKMA in these areas, instead it elaborates on how the relevant risk management measures may be applied or refined in case of e-banking for different types of customers. Authorized institutions should use a risk-based approach to managing the risks associated with e-banking. In this connection, authorized institutions should comply with the requirements in this module and should also make reference to other relevant Supervisory Policy Manual modules and HKMA guidance issued from time to time.
As part of the risk governance for e-banking, authorized institutions’ senior management should establish clear policies and accountability to ensure that a rigorous independent assessment is performed before the launch of any new electronic delivery channel of e-banking service, or a major enhancement to existing services. The purpose of the independent assessment is to validate whether the e-banking service complies with applicable regulatory guidance and whether sufficient risk management controls are in place in relation to the service or enhancement concerned. In general, items to be reported in the independent assessment should cover, at a minimum, the areas specified in Annex A, and the report should be submitted to HKMA on request.
Keywords: Asia Pacific, Hong Kong, Banking, E-Banking, Risk Management, Supervisory Policy Manual, Independent Assessment, HKMA
Previous ArticleFDIC Adopts Revisions to Company-Run Stress Testing Requirements
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
US Agencies (FDIC, FED, and OCC) issued a joint statement encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, to facilitate an orderly LIBOR transition.
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system.
HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
PRA published the policy statement PS23/20 on the calculation of stressed value at risk (sVAR) and risks not in value at risk (RNIV) under the market risk framework.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.