EBA published revised guidelines on major incident reporting under the Payment Service Directive (PSD2). The revised guidelines are estimated to reduce the reporting burden for payment service providers and will apply as of January 01, 2022. EBA acknowledged the ongoing negotiations on the EC proposal for an EU regulatory framework on digital operational resilience (DORA), which contains a proposal to harmonize and streamline the reporting of information and communication technologies (ICT)‐related incidents across financial sector in EU. Depending on the outcome of these negotiations, EBA guidelines may eventually be repealed when the DORA regulation applies, which is currently estimated to be in 2024 or later.
The revised guidelines optimize and simplify the reporting process and templates, focus on incidents with significant impact on payment service providers, and improve the meaningfulness of information to be reported. In light of the comments received on the consultation on these guidelines (published on October 14, 2020), EBA agreed with some of the proposals and their underlying arguments and introduced the following changes to the guidelines:
- The classification criterion was changed from "Breach of security measures" to "Breach of security of network or information systems." This change, which is the most substantive, is aimed at narrowing down the scope of the criterion, avoiding any overlap with other classification criteria, and providing a more tangible criterion that does not require complex assessment and implementation.
- Unnecessary steps were removed from the reporting process, allowing more time for the submission of final report to reduce the reporting burden on payment service providers.
- EBA further simplified and optimized the standardized reporting template, with these changes expected to lead to a reduction of reportable incidents by more than 10% and to facilitate payment service providers in their reporting of major incidents.
- EBA clarified the process and timeline for classification of major incidents, the meaning of the term duration of an incident, and other aspects in the guidelines, mainly in the instructions on how to fill out the incident reporting template.
The revised guidelines apply in relation to the classification and reporting of major operational or security incidents in accordance with Article 96 of PSD2 and are addressed to payment service providers and the competent authorities under PSD2. The original guidelines on major incident reporting were developed in 2017 in close cooperation with ECB and have applied since January 2018.
Effective Date: January 01, 2022
Keywords: Europe, EU, Banking, PSD2, Reporting, Payment Service Providers, Incident Reporting, Cyber Risk, DORA, Operational Resilience, Operational Risk, EBA
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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