Risk Management in Electronic Banking Concepts and Best Practices

Name: Risk Management in Electronic Banking Concepts and Best Practices
Availability: OutOfStock
ISBN: 9780470822432

ISBN-10: 0470822430

ISBN-13: 9780470822432

Edition: 2007

Authors: Jayaram Kondabagil

List price: $105.00

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Description:

The book is about risk management in an electronic banking environment written by a professional with more than thirty years experience in banking and IT sectors. He has seen the transformation of banking from the manual processes of 1975 to the electronic global banking of 2006 from close quarters. Much of his professional experience and practical approach has gone into the writing of the book. Banks traditionally built on the branch banking model now have to provide a variety of delivery channels from ATMs and Internet Services to Mobile Banking. The competition in the banking sector is determining the success of a bank by its ability to deliver innovative products and services in a… technologically advanced way that meets the changing needs of the customer. The fundamental characteristics of traditional banking have been changed by the introduction of electronic banking in many ways, which include: " Unprecedented speed of change related to technological and customer service innovation; " The ubiquitous and global nature of open electronic networks; " Integration of e-banking applications with legacy computer systems; " Increasing dependence of banks on third parties that provide the necessary information technology. However this has carried risks as well as benefits. Some of the traditional risks associated with banking activities like strategic, operational, legal and reputational risks have increased and influenced the overall risk profile of banking. There is an international convergence of initiatives to adopt uniform and sound risk management practices globally mainly led by the Basel Committee of Banking Supervision. The Basel committee and other international bodies connected with the financial sector have issued guidelines on risk management in an electronic banking environment including areas such as outsourcing, business continuity and information security. These recommendations are being adopted by more than a hundred countries across the world. These high level principles are generally recommendations only and one not put forth as absolute requirements or even best practice. It has been left to the individual banks to adopt a risk management framework depending on their individual risk profile. Many banks are facing a serious information gap as to how to adopt these principles in practice. This book, based on international standards, is an attempt to fill the gap by providing a one stop reference to all aspects of risk management in an electronic banking environment. With Basel II Capital Adequacy norms due for implementation across the world (different countries have set different deadlines starting from this year), there is a worldwide convergence of activity and increasing interest especially in operational risk management. As electronic banking forms a major component of operational risk, in the absence any relevant books in the area, this book is presented at the most appropriate time. The evolution of electronic banking, associated risks and the management of these risks are covered in the two introductory chapters of the book. A detailed discussion of best practices in respect of the supporting pillars like board and management oversight, managing outsourcing relationships, management of operational risk, security controls and business continuity management follows in the next five chapters. The last chapter deals with the legal and regulatory compliance requirements applicable for an electronic banking environment. The book, a pioneering work, is written with banking professionals in mind. The technical jargon has been kept to the bare minimum. The presentation of the topics has been made brief and to the point without compromising on the coverage, keeping in mind the demands on the time of today's banking professionals. The high level review checklist provided in

Book details

List price: $105.00
Copyright year: 2007
Publisher: John Wiley & Sons, Incorporated
Publication date: 10/26/2007
Binding: Hardcover
Pages: 288
Size: 6.44" wide x 8.98" long x 1.13" tall
Weight: 1.452
Language: English



List of Figures


List of Tables


Preface


Acknowledgments


Foreword


INTRODUCTION TO E-BANKING


E-Banking Basics


Evolution of e-banking


Impact on traditional banking


E-banking components


Regulatory approval


E-Banking Risks


Strategic risk


Operational risk


Compliance risk


Reputational risk


Other risks


Risk management challenges


The five-pillar approach


Product and Service-specific Risks


Internet banking


Aggregation services


Bill presentment and payment


Mobile banking


Weblinking


Electronic money


Cross-border transactions


New products and services


RISK MANAGEMENT


Risk Management Framework


Policies and procedures


Risk management process


Operational risk management


Governance and internal controls


Risk Management Organization


Organization structure


Board and senior management


Executive risk committee


IT management


Internal and external audit


International Standards


Basel Committee on banking supervision


COBIT 4.0


ISO 17799


OCTAVE


COSO - enterprise risk management


PCI data security standard


Financial Action Task Force


Corporate governance codes


Regulatory guidelines


INFORMATION SECURITY


Information Security Management


Security objectives


Security controls


Security risk assessment


Classifi cation of controls


Monitoring and testing


Incident response plan


Operational Controls


Personnel issues


Segregation of duties


Technical issues


Database management


Change management


Backups and off-site storage


Insurance


Fraud management


Technical Controls


Logical access controls


Identifi cation and authentication


Authentication methods


Audit trails


Network security


Firewalls


Malicious code


Information security incidents


OUTSOURCING


Outsourcing in E-Banking


Types of outsourcing


Material outsourcing


Supervisory approach


Key risks of outsourcing


Board and senior management responsibility


Outsourcing policy


Managing Outsourced Services


Outsourcing decisions


Risk assessment and control


Service provider due diligence


Offshoring


Contingency plans


Customer service


Monitoring and audit


Outsourcing Contracts


Contractual provisions


Right of access clauses


Termination clause


Offshoring contracts


Confi dentiality and security clauses


Business continuity clauses


BUSINESS CONTINUITY


Business Continuity Management


The main drivers


Board and senior management responsibility


Components of BCM


Business impact analysis


BIA methodologies


Recovery strategy


Business Continuity Plan


Major components of BCP


Continuity management team


Recovery procedures


Resource requirements


External communications


Plan maintenance


Awareness and training


Testing of BCP


Testing methods


Data Centers and Alternate Sites


Evolution of data centers


Location of the sites


Mitigating concentration risk


Data center design


Logistics management


Maintenance procedures


Alternate site models


External support


Business continuity in real life


LEGAL AND REGULATORY COMPLIANCE