FFIEC Issues Guidance on Operations and Wholesale Payment Systems - Circulars

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Circular

FFIEC Issues Guidance on Operations and Wholesale Payment Systems

August 31, 2004

Circular No. 11637

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

The Federal Financial Institutions Examinations Council (FFIEC) issued revised guidance for examiners, financial institutions, and technology service providers on two topics: information technology (IT) operations and wholesale payment systems.

The Operations Booklet provides guidance on the risks and risk management practices applicable to financial institutions’ technology operations. Effective support and delivery from IT operations are vital to a financial institution’s performance and success. IT operations have become more dynamic and include distributed environments, integrated applications, telecommunications options, Internet connectivity, and an array of computer platforms. The booklet discusses tactical and strategic support and delivery risks and the controls that should be in place to address them. The booklet also includes examination procedures to evaluate the quality of risk management related to these activities in financial institutions and technology service providers.

The Wholesale Payment Systems Booklet provides guidance on the risks and risk management practices applicable to financial institutions’ wholesale payment systems activities, including interbank and intrabank payment, messaging, and securities settlement systems. Financial institutions face increasing challenges to meet demands for resiliency and reliability, while continuing to develop and deploy innovative payment solutions to meet expanding global payment processing demands. The Booklet provides examination procedures to evaluate the quality of risk management related to these activities in financial institutions and technology service providers.

These two booklets represent the last in the present series of updates to the 1996 FFIEC Information Systems Examination Handbook. The updates address significant changes in technology since 1996 and incorporate a risk-based examination approach. With the release of these booklets, the 1996 Handbook is now completely retired.

The booklets are being distributed electronically and are available on the FFIEC website.

Press release
FFIEC Information Systems Examination Handbook

Contact:
Jeanmarie Davis
Assistant Vice President
Operations Risk Department
jeanmarie.davis@ny.frb.org

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