If you’re using a bank, chances are you’re doing a lot of services with them – but with the advent of digital technology and newer technologies, some critics and users have expressed concerns that banks should start telling users just what their policies are in terms of tech meltdowns including hacking and other cyber attacks.
Banks in the United Kingdom may be taking the first steps towards a more transparent way of working – although the first step towards the cause might be a bit of a frightening prospect. These banks have been directed to explain just how they plan to cope with a cyber attack or a technological failure. How will they work in such situations?
The country’s Financial Conduct Authority and the Bank of England have given financial institutions just three (3) months to be able to elaborate on just how they would respond should any of their systems failed.
This might be due to the recent loss of connection customers had with TSB, which left them unable to access any means of online banking for more than one month after a failed update to their systems last April. Now banks might be ordered into taking action should any of their plans are deemed to be poor.
The FCA and the Bank of England have particularly emphasized that the senior management of banks will likely be held responsible when there’s an observable and prolonged disruption to various features and services their institutions should have been able to provide seamlessly.
The two (2) organizations have now sought the views of customers, insurers, banks, and other financial firms with regards to this move and have launched a consultation on the matter.
They also emphasized that banks should observe more security measures and have better contingency plans in store for customers as upgrading computer systems just to match the features offered by more recent start-ups may result to catastrophic disruptions of service, especially when unprepared.
If such a disruption is unavoidable, they suggested perhaps just two days should be enough a leeway to make way for all the possible changes.
Jon Cunliffe of the Bank of England and Andrew Bailey of the FCA said in a statement that while banks upgrading their systems is a desirable step towards consumer convenience, it’s not exactly helpful if it leads to service disruption. They emphasized that operational disruption not only causes harm to consumers, but it can threaten the viability of financial market structures, individual firms, and have an impact to overall financial stability.
There’s yet to be any comments from financial firms that will be affected by this situation. There are also yet to be drafts towards the legislation on the matter, and the extent of the penalties senior management would face with regards to these system failures.
It’s interesting to take note how the United Kingdom has shifted its focus towards making sure its financial systems are stable, given the full launch of Brexit in a few months’ time. To remember, Brexit will fully sever the United Kingdom’s ties with the European Union, which in itself will have a number of financial and economic impact, among others.
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