The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

MPs Call for Action Over IT Failures, Target Cloud Service Providers

MPs from the influential Treasury Committee have slammed the “unacceptable” level of IT failures in financial institutions, warning that greater penalties should be exerted on institutions that fail to meet requirements and calling for the UK’s three major regulators – the Financial Conduct Authority, Prudential Regulation Authority, and the Bank of England – to be given more resources to deal with the growing problem.

An increase in the financial levies on banks could be needed to ensure that the regulators are adequately funded, said the committee in a report published today outlining the results of a public enquiry into the concerns. The report also raised concerns around the increased use of third-party providers of cloud services for computing power and data storage, citing them as a key source of systemic risk.

“The consequences of a major operational incident at a large cloud service provider, such as Microsoft, Google or Amazon, could be significant,” noted the report. “There is, therefore, a considerable case for the regulation of these cloud service providers to ensure high standards of operational resilience.”

Guy Warren, CEO of monitoring and analytics software provider ITRS Group, submitted evidence to the enquiry.

“Operational resilience has deteriorated over the last few years as the number of digital channels and volumes of transactions have increased, with very little pause for thought,” he tells RegTech Insight.

“This morning’s announcement from the MP committee is a strong message that banks need to take a step back and put operational resilience at the top of the agenda. The resilience of IT systems no longer falls to the back-office IT team. As the regulator pushes this operational resilience campaign forward, executives at retail banks can expect to be more in the spotlight than ever and be personally accountable for the operational resilience within their organisation.”

Related content

WEBINAR

Recorded Webinar: Developing operational resilience

Financial institutions’ operational resilience – essentially the ability to prevent, adapt and respond to, and recover and learn from operational disruptions – has come under extreme pressure during the coronavirus pandemic, with last year’s March lockdown creating unprecedented circumstances for financial firms. Employees working from home raised the stakes, as they still do, adding to...

BLOG

Advancing Regulatory Data Collections Systems

By Ken Lamar, Founder and Principal Partner, Lamar Associates LLC (With Robert Lee, Executive Director, North America Client Engagement, AxiomSL). Regulators are beginning a journey to design the next generation of data collection systems. A critical aspect of the design process is the need for new data capabilities to effectively conduct supervisory activities to ensure...

EVENT

RegTech Summit New York City

Now in its 5th year, the RegTech Summit in NYC explores how the North American financial services industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Best Practice Client Onboarding

Client onboarding is central to the success of banks, yet it continues to present challenges and the benefits of getting it right are difficult to achieve. The challenges arise from siloed systems, manual processes and poor entity data quality. The potential benefits of successful implementation include excellent client experience, improved client acquisition and loyalty, new business opportunities, reductions in costs, competitive advantage, and confidence in compliance.