The EU needs to have a Union-wide system of Information Communication Technologies security for its financial institutions such as banking, investment and insurance, Alfred Sant told the Economic and Monetary Affairs Committee of the European Parliament.
During a discussion for the consideration of a draft report on the Digital Operational Resilience Act, Alfred Sant said digital operational resilience is crucial if the integrity of the single financial market is to be safeguarded.
Alfred Sant is the shadow rapporteur on behalf of the S&D group in the European Parliament for this important but complex piece of legislation for the financial sector and digital technologies.
The ever-increasing dependency of the financial sector on software and digital processes means that ICT risks are inherent in finance. Financial firms have therefore become targets of cyber-attacks, which result in serious financial and reputational damage to clients and firms.
The European Commission has proposed, with the Digital Operational Resilience Act, that all financial services firms respect strict standards to limit the immediate impact and further propagation of ICT-related incidents.
It is designed to consolidate and upgrade ICT risk requirements throughout the financial sector to ensure that all participants of the financial system are subject to a common set of standards to mitigate ICT risks for their operations.
“Digital transactions multiplied over the last decade and have increased exponentially during the COVID crisis as has the threat of disruption”, Alfred Sant told the Economic and Monetary Affairs Committee.
“As part of its digital finance strategy, the Commission has been constructive in its approach. However, the text elaborated by the Commission has been criticised by financial institutions as being too prescriptive. I see our task here as helping to make workable compromises happen”.
Alfred Sant congratulated the rapporteur Billy Kelleher for his draft report, which in his view clears the ground for improvements to the Digital Operational Resilience Act that make great sense.
“Among them: a streamlining of the oversight mechanisms, a strong insistence on the concept of proportionality, a greater sensitivity to the implications of relations between financial institutions and third party ICT service providers, as well as the need to protect the confidentiality of clients of financial institutions across the board”. “As I see it, to further improve the Regulation, we should continue to build on what Mr Kelleher has laid out while taking into account all bona fide ideas still being made by interested players in the financial sectors involved”, Alfred Sant stated.