Tech Lessons to be Learned from Bank of NY Mellon’s £126m Compliance Fine
The Bank of New York Mellon was recently fined £126 million by the Financial Conduct Authority (FCA) for failing to comply with regulations intended to protect client assets.
The FCA found that the American bank’s London branch failed to record data correctly – resulting in the commingling of client funds with the firm’s own. This was an administrative error that could have been avoided had the correct technology been in place.
Invest in technology to help you stay compliant
Financial Services organisations must invest in the latest technologies in order to stay ahead of the competition.
Chief Operations Officers for Financial Services businesses know that they need to utilise technology to drive operational efficiency so they can maximise revenues and profit margins.
However, the ever changing world of IT makes it hard for COOs to keep up with advancing technology.
Many Directors of Operations have decision-making control over IT, but don’t come from a technical background, so determining which technology solutions will improve operational efficiency can be daunting prospect. In addition, knowing which solutions will not compromise their ability to be compliant with FCA regulations can be an even harder task.
Financial Crime Threat and FCA Regulations
Security is a top concern for Financial Services businesses as their data is a target for cyber crime and rigors need to be put in place to disarm this threat, such as:
- Any access to financial data must be verified by two factor authentication so the individual accessing it and all of the details are recorded.
- Data must also be encrypted while in use and when stored to add an additional layer of security.
- Businesses must also have a robust disaster recovery plan in place, with secure backup of data off-site so that the sensitive data would survive any disaster. The offsite location is usually a data centre, and this must be located in the UK and also have high security standards.
For many COOs it can be difficult to know which solutions to invest in to mitigate the risk of financial crime and ensure compliance with the FCA’s security of data regulations, and as such many will turn to IT Support companies for advice.
It’s important to remember however, that many IT consultants say they understand the Financial Services industry, but in reality they don’t know about the strict FCA regulations that your industry faces, or which solutions are best for improving efficiency and boosting revenue whilst maintaining FCA compliance .
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