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
ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures
The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).
NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks
The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development
EBA Issues Multiple Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.
EC Adopts Regulation on Own Funds, Issues Other Updates
The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model
CDP Platform to Report Plastic-Related Impact, Issues Other Updates
The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide
IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments
The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,
BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks
The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.
FCA Sets Out Business Plan, Launches TechSprint on Greenwashing
The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets
UK Committee Sets Out Recommendations for Next Phase of Open Banking
The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members
ECB Publishes Multiple Regulatory Updates for Banking Institutions
The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,