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Central Bank Risk Management, Fintech, and Cybersecurity

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  • Mr. Ashraf Khan
  • Majid Malaika

Abstract

Based on technical assistance to central banks by the IMF’s Monetary and Capital Markets Department and Information Technology Department, this paper examines fintech and the related area of cybersecurity from the perspective of central bank risk management. The paper draws on findings from the IMF Article IV Database, selected FSAP and country cases, and gives examples of central bank risks related to fintech and cybersecurity. The paper highlights that fintech- and cybersecurity-related risks for central banks should be addressed by operationalizing sound internal risk management by establishing and strengthening an integrated risk management approach throughout the organization, including a dedicated risk management unit, ongoing sensitizing and training of Board members and staff, clear reporting lines, assessing cyber resilience and security posture, and tying risk management into strategic planning.. Given the fast-evolving nature of such risks, central banks could make use of timely and regular inputs from external experts.

Suggested Citation

  • Mr. Ashraf Khan & Majid Malaika, 2021. "Central Bank Risk Management, Fintech, and Cybersecurity," IMF Working Papers 2021/105, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/105
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    Cited by:

    1. Van Roosebeke, Bert & Defina, Ryan, 2022. "Central Bank Digital Currencies: A Review of Operating Models and Design Issues," MPRA Paper 116240, University Library of Munich, Germany.
    2. Petar, Radanliev, 2023. "Review and comparison of US, EU, and UK regulations on cyber risk/security of the current Blockchain Technologies - viewpoint from 2023," MPRA Paper 116885, University Library of Munich, Germany, revised 2023.
    3. Yelena Popova & Olegs Cernisevs, 2022. "Smart City: Sharing of Financial Services," Social Sciences, MDPI, vol. 12(1), pages 1-17, December.
    4. Sidney Kawimbe & Mubukwanu Kwalombota, 2024. "Mitigating Cybersecurity Risks in the Digitization of Banking Operations: Strategies, Challenges, and Best Practices for Zambian Commercial Banks," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3s), pages 2988-3005, March.
    5. Wang, Haijun & Mao, Kunyuan & Wu, Wanting & Luo, Haohan, 2023. "Fintech inputs, non-performing loans risk reduction and bank performance improvement," International Review of Financial Analysis, Elsevier, vol. 90(C).
    6. Milena Vučinić & Radoica Luburić, 2022. "Fintech, Risk-Based Thinking and Cyber Risk," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(2), pages 27-53.

    More about this item

    Keywords

    IMF Risk Management TA; risk landscape; B. IMF AIV; IMF surveillance; case example; Fintech; Central bank risk management; Cyber risk; Operational risk; Global; Middle East and Central Asia; Asia and Pacific; Western Hemisphere; Eastern Europe;
    All these keywords.

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