Third-party relationships are one way for community banks to bring new technologies online, but in doing so the banks must hold a thorough understanding of the associated risks, a member of the Federal Reserve Board told a conference Wednesday.
In virtual remarks, Fed Gov. Michelle Bowman told the Midwest Cyber Workshop (organized by the Federal Reserve Banks of Chicago, Kansas City, and St. Louis) that the Fed recognizes banks need to adopt new technologies to meet customer demands, to take advantage of efficiencies and cost savings, and to remain competitive in the marketplace.
The keys, she indicated, are for banks to appropriately manage cyber risk and to stay in communication with their regulators.
“While we expect banks to be in touch with us when an event happens, cyber events should not be the first time a cyber-risk conversation occurs between a bank and its regulator,” she said. “We look forward to working with you to assist in clarifying expectations, applying regulatory guidance or seeking feedback on cyber-risk management strategies. We encourage bank management teams to engage with regulatory points of contact whenever questions arise on cyber security matters just as with any other regulatory matter.”