01 Jul FRB – Publication – Embracing Agility and Innovation During the Pandemic and the New Normal
July 1, 2021 – The FRB published an article on bank resiliency and critical risks for financial firms, post-Covid. The intersection of digital acceleration, as well as heightened cyber and 3rd-party vulnerabilities.
Digital Transformation, Cyber and Third-Party Risks
Highlights pandemic’s role to accelerate digital transformation and partnerships with fintech, reg-tech, vendors to meet consumer/client needs, and workspace changes. Specifically, address cybersecurity risk as attacks become sophisticated and persistent. The frequency and magnitude of attacks place strain on firms to advance internal controls. As an example, firms chronicled digital manipulation of identity documents. The article also addresses third-party risk management as vendors integrate into firms’ operations, handling sensitive, material non-public information, digital banking/apps. Also, 3rd-party reg-tech solutions for BSA/AML and fair lending, that drive operational efficiency but may also leave firms vulnerable to cyber-attack and data breaches. Underscored vigilance to monitor access controls and where customer data is stored.
For more information, visit www.communitybankingconnections.org.