JWG urges sector to address systemic technology risk blind spot
JWG is proud to announce the publication of a ground-breaking research report ‘Risk control for a digitized financial sector.’
The analysis identifies a large systemic technology risk blind spot which regulators must take the lead in addressing. JWG urges Financial Services regulators and firms to collaborate with technology firms on new RegTech standards in advance of cloud and data crises.
The paper, which incorporates findings from JWG’s RegTech 2.0 conference and dozens of discussions with regulators, regulated and academia, builds on 10 years of research into regulation implemented since the Great Financial Crisis. JWG also moderated a virtual panel on IT and data risk last month which can be downloaded here.
JWG’s CEO, PJ Di Giammarino, commented: “Can a bank run its lending portfolio without loan data? Catastrophic data loss is the big risk to financial services that firms’ and regulators’ radars are just starting to register but is growing fast as the industry shifts infrastructure and data into the cloud.”
Di Giammarino continued; “Regulators must bring the industry to the table to think more deeply about the value of data to their enterprise and how to account for the risks. This paper is a call to action for regulators, regulated and technology providers to debate a digital risk control framework before we find financial services embroiled in a great infrastructure crisis.”
Francis Gross, Senior Advisor, European Central Bank speaking in a personal capacity said: “In a hyper-networked world, technology itself generates risks which the current frameworks and cultures are ill-equipped to identify and address. Industry and authorities need to understand and accept that a collective problem is emerging and that we need to address it together in a comprehensive manner. Public and private sector strategies must align on common solutions, such as infrastructures, informed by further independent study. This report offers useful findings which could inform further efforts.”
Dr. Richard Harmon, MD Financial Services, Cloudera said: “Cloud is a game changer. It can help accelerate the move to digital operations and enable firms to innovate at speed. At the same time, it also has significant implications for how companies view their operational risk in the new hybrid, multi-cloud world. This shift to new cloud models presents many new operational complexities and regulators are just beginning to address specific concerns in their recent regulatory guidance."
Moving forwards, JWG will continue frame the debate on appropriate next steps, engage the key stakeholders and help define a path for action. You can join their new Digital Integrity LinkedIn group here.
To download a free copy of the report click here.