As the financial sector’s reliance on technology rises relentlessly, federal regulators are launching a consultation on technology-driven risks.
The Office of the Superintendent of Financial Institutions (OSFI) has undertaken a three-month consultation to examine the risks posed by the increased use of technology by financial firms, including the reliance on advanced analytics and cloud services, along with ever-present cybersecurity concerns.
“Understanding the financial sector’s use of technology and how technology risks are managed is central to this consultation,” OSFI said.
Its discussion paper focuses on the risks posed by cybersecurity, artificial intelligence and machine learning (AI/ML), and the use of third-party services such as cloud computing.
The paper noted that the Covid-19 pandemic has “further accelerated digital transformation and automation” among financial institutions, spurring a rapid shift to remote work and increasing reliance on mobile banking.
The pandemic, OSFI suggested, can provide lessons on operational resilience, such as governance, infrastructure, risk management, business continuity and communications.
OSFI called on respondents to its consultation to include pandemic-related insights in their submissions.
The deadline for feedback on the paper is Dec. 15.
“This consultation will help OSFI to refine its regulatory and supervisory framework in a complex, rapidly changing digital world,” said Ben Gully, assistant superintendent, regulation sector, at OSFI.