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Bank IT Systems

Dáil Éireann Debate, Tuesday - 15 April 2014

Tuesday, 15 April 2014

Questions (209)

Seán Kyne

Question:

209. Deputy Seán Kyne asked the Minister for Finance in view of how central to the economy and everyday lives of all citizens the effective operation of the day-to-day banking IT system is across the financial institutions, if there is effective oversight in place to ensure a minimum standard of operation, particularly in consideration of huge disruption that arises when such systems malfunction. [18058/14]

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Written answers

Customers have a legitimate expectation of high quality, uninterrupted services, whether provided through traditional or online channels. It is my role as Minister for Finance to put in place an appropriate legislative framework for the regulation of the financial services sector. The Central Bank is responsible for prudential supervision and financial regulation including consumer protection. The Financial Services Ombudsman is an independent office established to deal with consumer complaints about their dealings with financial institutions. Therefore, I believe that we have a robust regulatory framework in Ireland to deal with issues such as computer problems that may affect customers of banks operating here.

The Central Bank has informed me that it expects all firms to have adequate systems and controls in place and where issues that impact customers arise they should be addressed and rectified urgently, particularly as customers are increasingly using and becoming dependent on online and mobile banking services.

In this regard, the Central Bank expects firms to communicate clearly and promptly with affected customers when a technical incident occurs, including details of the impacted service, details of alternative access to services and an undertaking that identifiable loss will be remediated.  The Central Bank's expectations have been communicated to banks and are provided for in the Consumer Protection Code as follows: section 2.4 of the Consumer Protection Code 2012 provides that a regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it has and employs effectively the resources, policies and procedures, systems and control checks, including compliance checks, and staff training that are necessary for compliance with this Code.

Section 10.2 also provides that a regulated entity must resolve all errors speedily and no later than six months after the date the error was first discovered, including: a) correcting any systems failures; b) ensuring effective controls are implemented to prevent any recurrence of the identified error; c) effecting a refund (with appropriate interest) to all consumers who have been affected by the error, where possible; and d) notifying all affected consumers, both current and former, in a timely manner, of any error that has impacted or may impact negatively on the cost of the service, or the value of the product, provided, where possible.

In addition to these requirements, the payments system is monitored by the Irish Payments Services Organisation (IPSO). IPSO, in conjunction with the Central Bank, has implemented an annual Risk Assessment exercise with the Clearing Banks.  This annual process assesses the risk management capabilities across the Banks in relation to payments activities. The submissions from the Banks are externally validated.

Question No. 210 answered with Question No. 195.
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