Other violent violent warning services for banks

The chaos that led to the paralysis of digital systems around the world on Friday is specifically those kinds of crises that have caused the concern of financial supervisory bodies over the past few years. Even worse, the authorities who oversee the banking sector in the United States have recently criticized the most prominent banks and lending parties for their poor management of this kind of operational risk in secret reports. In both cases, it was a warning cry and a warning to the risks associated with the presence of a small group of dominant parties that provide many important services to this sector. A small damage file has caused an update for an electronic insurance program of the company “Crowdstrike Holdings” in the service breakdown for several hours in banks, money management companies and stock exchanges, and this included malfunctions in “Bank of America” ​​and “JP Morgan Chase” and others. The chaos did not once, just a day ago, broke out the pay network with a high value in the UK due to a separate operational problem, and the houses and other transactions were discontinued. Fortunately, compared to airline lines to cancel their flights due to the problem of ‘Kraoud Strike’, most markets and payment systems have continued to do their jobs, even though some banks have been in the ATMs or trade divisions. The management of the operating risk in the banking sector, but the closing process is still a strong reminder that the banking sector and its supervisory bodies need to make more efforts to alleviate these types of potential disasters. It is anxiety that some major banks themselves do not handle these risks as they should. In the United States of America, the ‘Currency Monitoring Office’ (OCC), which oversees all national banks, federal savings associations and foreign bank branches, found that half of the 22 banks supervised, limited to the realization of operational risks, according to a report published by “Bloomberg New”. Successful cyber attacks or any major problems in one or more prominent bodies that produce woolly computed services can face lending bodies suffering from poor risk management, many problems with carrying out their basic work. Bank governing bodies focus more on the issue of industry risks in general, which covers everything from fraud and trade errors related to the issuance of purchase or sales orders, and even computers. These problems can lead to high costs of banks in the form of compensation, lawsuits or fines. In the 2024 US federal stress test, total expected operating risk losses were $ 193 billion for 31 banks participating in the test. It was the largest source of loss for the lending authorities, which is greater than the credit card losses estimated at the $ 175 billion test. ‘Basel 3’ Capital Base focuses a part of the focus on the best way to face the size of the losses that any bank can face separately, which in the United States has become a major struggle in the heart of organizational bodies to set up the rules associated with capital within the framework of the SO -Called “Basel 3” rules for the last stage. The banks under the Endure Test have some of the capital needed to cover these risks as part of their endurance, but they complain that these rules do not have transparency. Meanwhile, the last phase of “Basel 3” rules is trying to offer a clearer model for operational risk capital, but it uses a way to determine the size of banks and their previous losses, which look tighter than other rules. None of the two rituals are satisfactory, but without a better understanding of the risks and control, the organizational bodies should prefer to increase the capital to reduce it. However, there are a limited number of service providers, but there is a greater and simpler problem that the financial stability supervisors feel increasingly anxious about it, which is the excessive banks and markets to rely on a limited number of third parties in matters such as wool -computing services, software and risk models development. For example, the UK found that 65% of UK financial enterprises deal with the same four cloud service providers. Earlier this year, the ‘International Monetary Fund’ awarded a chapter of the annual financial stability report for cyber risks, pointing out that the largest important banks in the world are increasingly dependent on one of the group of information technology businesses. The ‘International Monetary Fund’ has found a larger interference in the use of large banks for the same products and services of information technology, compared to the use of insurance companies or asset management. The regulatory authorities have discussed the addition of classifications and conditions of structural interest for some major bodies that do not provide financial services, which will carefully monitor the operations of these entities, and forcing banks to diversify the businesses they use. The European Central Bank has tested banks on this for some time, partly because of the lack of large local cloud computing companies, making them less strict in this supervision. Banks defend their suppliers, banks have defended the most important companies that provide cloud services such as ‘Microsoft’, ‘Alphabet’ and ‘Amazon’, and explain that many different data centers have been distributed around the world, and that it all exclude a lot due to a natural disaster, energy loss or electronic attack. However, the disaster to upgrade the insurance program that took place on Friday reveals the weakness of this argument. To be fair, the velocity fits the money sector to adapt to the directions to stay at home as a result of Corona, that the system can achieve flexibility when strengthened. But the tendency of some information technology businesses that are dominated by providing more complicated services for many of the largest banks in the world at the same time is determined. It is easy to expect a bigger disaster at the doors.