Risk Management of E-Banking Activities
As noted in the prior section, e-banking has unique characteristics that may increase an institution's overall risk profile and the level of risks associated with traditional financial services, particularly strategic, operational, legal, and reputation risks. These unique e-banking characteristics include:
- Speed of technological change,
- Changing customer expectations,
- Increased visibility of publicly accessible networks (e.g., the Internet),
- Less face-to-face interaction with financial institution customers,
- Need to integrate e-banking with the institution's legacy computer systems,
- Dependence on third parties for necessary technical expertise, and
- Proliferation of threats and vulnerabilities in publicly accessible networks.
Management should review each of the processes discussed in this section to adapt and expand the institution's risk management practices as necessary to address the risks posed by e-banking activities. While these processes mirror those discussed in other booklets of the IT Handbook, they are discussed below from an e-banking perspective. For more detailed information on each of these processes, the reader should review the corresponding booklet of the IT Handbook.
Board and Management Oversight