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RBNZ has its eye on cyber threats

Thursday 27 July 2017

The Reserve Bank of New Zealand (RBNZ) said both government and industry have a role to play in tackling cyber threats to the NZ market.

At the Future of Financial Services Conference, Reserve Bank Head of Prudential Supervision, Toby Fiennes, said that as prudential regulator, he is looking to see if banks are taking the threat of cyber risk seriously and whether they are implementing the necessary measures.

Cyber security is a global problem that will not go away. Thus, organisations have the responsibility to inculcate string data protection measures into their risk and compliance frameworks.

“The dynamic cyber environment means organisations have to be nimble in their approach to cyber security—that is, focused on outcomes, rather than prescriptive compliance exercises,” Fiennes said.

According to Fiennes, cyber threat presents a unique challenge to the market because the ‘attack footprint’ is just too broad to be eliminated. However, for the moment, RBNZ has decided not put out more prescriptive requirements.

Fiennes said that the bank is also watching the development of digital disruption in the financial industry. He has ‘no doubt’ new technologies will improve efficiency in the banking sector.

“We’re working with other agencies, such as the FMA and Ministry of Business, Innovation and Employment, to ensure that New Zealand presents an environment where digital financial innovation can flourish, provided it is done safely,” Fiennes said. “In our view, New Zealand’s financial market regulatory settings support innovation and industry-based solutions, and we see no need to actively steer potential solutions from industry by providing a concessionary environment for new entrants.”