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The growth of cloud computing, whereby key banking services are
aided by outside tech companies, the rise of AI, use of
distributed ledger technology (DLT), and spread of open banking,
or external fintechs sharing customer data with banks, create
new risks, the Basel Committee of banking regulators said.
"These can include greater strategic and reputational risks, a
larger scope of factors that could test banks’ operational risk
and resilience, and potential system-wide risks due to increased
interconnections," it said.
External operators used by banks create "new nodes of channels
and interconnections" as they may not be subject to the same
level of regulatory standards as lenders, the committee said in
its report.
Regulators often compile reports to ascertain facts and scope
out a sector to provide a foundation for any new rules.
"Where necessary, it will consider whether additional standards
or guidance are needed to mitigate risks and vulnerabilities,"
the committee said.
The Basel Committee is made up of central bankers and banking
regulators from the G20 economies and other countries, whose
members commit to applying rules it approves.
(Reporting by Huw Jones; Editing by Alison Williams and Mark
Potter)
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