Since Singapore MAS released the TRM guideline last month, I believe many people are studying them (including me). Big Four accounting firms are usually most active in publishing explanatory reports and article with a purpose to generate more business leads.
However, a group of Vmware certified professionals are taking the lead this time. They worked together and published a MAS TRM analysis report focusing on DR and visualization. Some of the observations are valid. The document could be found at Vmware website
A few I like to share
- Process and Committee oriented. No Agile and rapid innovation.
- All social media sites, cloud-based storage, web-based emails are classified as “unsafe internet services”. No technical fact given to support why they they are all insecure.
- Trust no employee :Sys Admin must be tracked.
When attending a PWC Singapore meeting on new MAS guideline, there are many questions in my head regarding how the 1 hour incident reporting requirement could be fulfilled.
The requirement requires banks operating in Singapore to report to MAS within one hour when relevant incident ( security breaches and malfunction) is discovered.
There are a few levels of complexity. One is boundary of application issue. The other is SLA issue.
Most international bank system are located in multiple time zone. Trading system maybe in London and centrally managed. Singapore application is running side by side with other regions applications. If only Japan application is under attack, shall MAS be informed taking the consideration that the affected JP application is running on same hardware platform as SG? If yes, MAS will be a central info hub of security incident globally. Also with time zone issue, international banks in Singapore will need to respond global incidents and be able to decide if the incident happening in London should be reported to MAS, not to mention the one hour requirement.
Systems are no longer running localized version. Virtualization and cost saving already change the old system to centralized and shared platforms. A clear boundary could not be easily draw when a component is affected.
I believe this question is already considered by relevant parties and MAS. One possible solution is focus on whether the remote incident materially impact Singapore operation. There should be some mutual understanding between regulator and banks on how to limited the catch all possibility of incident reporting requirement. Will talk about SLA later
Reader of the new TRM guideline from Singapore Monetary Authority will be surprised by the changes it made. It is not an simple update but a major rewrite of some of the sections. Also it incorporated key and fundamental changes in financial technology.
At the introduction section, the author set the tune for the whole document by stating that IT is no a cost center only and should be integrated with business strategies. This type of statement is advocated by vendors for a long time but I believe it is the first time a banking regulator making the same statement in a TRM guideline. From here, the reader could expect TRM function is not only about system vulnerability or malware, project risk, governance and outsourcing are also important.
Para 1.0.1 “IT is no longer a support function within a financial institution (“FI”) but a key enabler for business strategies”
The author also states user are more IT-savvy. from my experiences, the more accurate adjective would are user are getting more IT-demanding and require more features. Usability of non-financial internet and mobile applications has revolutionized by the uses of HTML5, AJAX and even 3D graphic. Users are demanding the old html only Internet banking to follow. MAS also sense these changes and urge banks to fully understand the risk before bending over backwards to please users.
Para 1.0.3 “FIs are also faced with the challenge of keeping pace with the needs and preferences of consumers who are getting more IT-savvy and switching to internet and mobile devices for financial services, given their speed, convenience and ease of use.”
Singapore Monetary Authority after one year consultation released a Technology Risk Management Guideline. It is a major overhaul of the last version which was published in 2008. For sure, the banking industry and banking technology changed a lot with the omnipresence of 3G network and mobile devices.
As part of my job is to implement TRM in FI, I will write out my comments and observations in the coming posts. But first let us take a 3000 feet view of this document. A few text analysis tool and visualization graphic will do the job.
The first graph is a word cloud which shows high frequency keywords. FI means Financial Institutions. Most of the words are general IT terms like data and systems. But should notice that “ensure” appears in a relative big size !!
The left graph show the three selected keywords: Ensure, Access and Recovery. The peaks of access and recovery show that although they are used often, this keyword mainly used in one particular chapter.