OCC names cybersecurity as key risk for federal banking system

The US’ Office of the Comptroller of the Currency (OCC) has named cybersecurity and technology management as a key emerging risk.

In its semi-annual Risk Perspective, the OCC also highlighted operational, credit, and interest rate risks are among the key themes for the federal banking system.

Stipulated in the report, Operational risk has been elevated as banks look to adapt to new operating environments, particularly the need for evolving systems to meet ongoing cybersecurity threats.

Another highlight of the report is that credit risk has accumulated in many portfolios. The OCC stated banks should prepare for a cyclical change while credit performance remains strong. Preparation includes maintaining robust credit control functions, particularly credit review, problem loan identification and workout, collections, and collateral management.

Recent volatility in market rates has also led to high levels of interest risk and banks are facing strategic risks from non-depository financial institutions, innovative technology and data analytics.

The new report covers risks facing national banks and federal savings associations and covers five areas: the operating environment, bank performance, special topics in emerging risk, trends in key risks, and supervisory actions.

Earlier in the year, the OCC released the final rule to update regulations which will mean banks will need to adhere to a new standard for measuring counterparty credit risk.


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