The Banking Executive Magazine - Issue 150, June 2021

ISSUE 150 JUNE 2021 the BANKING EXECUTIVE 1 Editorial CYBER ADAPTATION IN THE BANKING INDUSTRY Banks are profoundly dependent on the multifarious system of financial market infrastructures which support its day to day business actions. No bank can afford to underrate the associated risks of IT, which include cyber risks. Cyber adaptation is an objective all banks seek and all regulators struggle to attain. As our financial system is interrelated not only among other banks but also with many other market contributors and infrastructure, the whole chain is only as strong as its weakest link. And in that sense, many actors in the financial system are parts of the same chain. Cyber risk is part of the general risk management procedures, of general crisis management, it is categorized under the umbrella of operational risk. The international financial crisis that began in 2007 has given rise to various changes and to the emergence of new challenges. Central banks are, today, in a rather different and novel situation compared with where we were before the crisis some 10 years back. Cyber Resilience marks the beginning of a new era for Central bankers and regulators. The main challenge for regulators to be one step ahead in their regulatory policy and able to fully implement the reforms and to closely monitor their impact on the financial sector. Central banks have to strike a balance between catalyzing innovation and the efficiency provided by the new technologies, while maintaining a sound regulatory framework in order to achieve the dual objective of economic and financial stability. As the financial sector is adapting to this new reality of advanced and efficient payment systems and the rise of fintech companies, banks are taking the new technologies on board, through strategic alliances with new technology firms. Turning to consumer protection policies, it is vital that consumers understand how the new services function and the attendant risks. This could be achieved through strengthening our information and financial education policies. Dr. Joseph Torbey, Chairman - World Union of Arab Bankers