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27 March, 2019
News and research on financial software quality assurance and risk management

Bank of England Focuses on IT Resilience in Annual Supervisory Report

28 February 2019
IT incidents and policy developments around IT resiliency were a major focus of the Bank's annual policy report.

The Bank of England has published its annual report on financial market infrastructures. In it, the regulator details its activities directed at the UK’s financial infrastructure, as well as major incidents, which impacted agents in the sector in 2018.

In 2018, operational resilience was a major topic on the regulator’s radar. Among other initiatives, the Bank undertook a thematic review of the IT infrastructure resilience of recognised payment systems. The review included examination of IT resilience, including data centres, frameworks for IT disaster recovery and business continuity risk scenario planning with regard to IT systems, as well as disaster recovery testing.

The report highlights two major incidents during the year, which highlight the importance of IT resilience. The first, on June 1, impacted Visa Europe’s payment authorisations system and prevented a significant number of customers from using their debit and credit cards. The partial service outage lasted for ten hours and affected 2.4 million of the 27.6 million Visa transactions that were attempted on UK-issued cards during that time.

The second incident took place on July 8 and caused partial delays in FPS’s payment processing being delayed for four and a half hours. The report notes that the vast majority of delayed payments were completed during the following days and Pay.UK (owner of Bacs and FPS) assured customers that none of the obligations would remain unsatisfied as a result of a late payment.

The BoE intends to continue its work on operational resilience in 2019, with a focus on cyber resilience. The Bank will aim to develop a comprehensive supervisory approach and policy in collaboration with the FCA and the PRA. In 2018, the three organisations jointly published a discussion paper setting out the scope of their research and laying out definitions for concepts around operational, IT and cyber resilience.

The full report can be accessed on the Bank of England's website.

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