A blueprint to help financial institutions help comply with Basel II regulations by 2006 has been drawn up by a security consultancy.
@Stake said its 5x5 Basel II information security model will helps banks achieve successful compliance implementation once the requirements presented by Basel II are clearly understood by institutions.
The Basel II Capital Accord is an amended regulatory framework that has been developed by the Bank of International Settlements that requires all internationally active banks, at every tier within the banking economy, to adopt similar or consistent risk-management practices for tracking and publicly reporting exposure to operational, credit and market risks. As such banks need to plan, implement and maintain a comprehensive program of risk prevention, detection, analysis and management.
The consultancy's director of strategic solutions, Samir Kapuria said the challenge is not only in making IT systems compliant and drew parallels with Y2K.
"Where Y2K was a surge of IT activity oriented just around ensuring information system availability, Basel II's operational risk requirements have to include not just information availability but confidentiality and integrity too," said Kapuria.
