Should Asian banks pay heed to ECB’s concerns about technology?
NEW AND EMERGING technology is something banks have always been cautious about.
However, the European Central Bank’s (ECB) Director-General (DG) Korbinian Ibel cautioned banks about the use of any kind of technology, especially external data storage and the cloud.
“There will be accidents, especially in the cloud. It’s not that clouds are more vulnerable, they’re actually often better protected than in-house systems, but they’re seen as juicy targets.”
According to the ECB DG, institutions see the value of the cloud but also understand that the banker is always responsible for their data and services which is why they tend to avoid putting highly confidential data on public clouds.
Of course, in the future, European banks such as Deutsche Bank AG and BNP Paribas, among others, will bet big on the cloud.
They’re already users of cloud services offered by technology giants such as Microsoft, Google, and Amazon, and it is natural for them to move more applications and workflows to the cloud in the future, in a bid to save costs.
Deutsche Bank actually started its move to the cloud more than a decade ago, won an award for its adoption of cloud services, and has never looked back slowly but surely positioning itself to run entirely on cloud-powered solutions.
Of course, the optimism isn’t shared by bankers across the pond in the US where the cloud has exposed critical customer data and resulted in penalties and losing customer trust.
The recent Capital One incident, for example, left a bad taste in the mouths of bankers and stakeholders alike and raised many questions about the use of cloud computing services in the financial services industry.
However, the reality is that implementation of cloud services, as well as any of the other new and emerging technologies, need to be thought through.
Bankers, in Asia or anywhere else in the world, therefore, shouldn’t be concerned about adopting new technologies that benefit their customers, improve their workflows, or reduce costs.
Instead, as the ECB DG pointed out himself, bankers need to get more holistic about how they protect their data and secure their infrastructure.
Just hiring more tech experts isn’t enough. Ibel emphasized that there is a need to create a common understanding of IT requirements and risks (including security) at the board level, in order for real progress to be made.
Banks, just like organizations in any other industry, need to manage security concerns on their digital transformation journey as they climb the digital maturity curve.