December | 2012
Risk management is very critical to the functioning of banks. There are therefore several regulations and ordinances, such as Basel II and III, PCI-DSS and SOX to name a few, that address the enterprise risks that banks face on an ongoing basis. In addition, there are pre-built frameworks that can be deployed on several industry-leading risk and compliance platforms, including SAP, Archer and Oracle. But, what about IT infrastructure? How can banks ensure that risks to their IT infrastructure are contained and addressed?
Recently, companies learnt how vulnerable their data centers were, thanks to Hurricane Sandy. Flooding and power outages caused by the super-storm forced several New York data centers operated by Datagram, Peer1, etc. to shut down. And this was not an isolated incident — in August 2003, a blackout in Manhattan, NYC, crippled around 320 data centers and affected over 1000 companies, 240 of which were financial institutions. Such incidents do not happen often, but when they do, they can bring an unprepared organization to its knees.
Banks can manage IT risks and compliance in the following ways:
The regulatory and compliance environment is becoming more complex by the day, demanding significant effort and focus from banks. As banks grow global and expand across national boundaries, the types and number of risks they are exposed to increases. Hence it is necessary that financial institutions have an IT Risk Management strategy in place, to align with the overall Enterprise Risk Management strategy.
Harish Sudhamalal- Practice Head, GIS, Wipro Limited
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