SINGAPORE – All financial services and e-payment firms in Singapore must, from Monday (Jan 18), follow a new set of central banking rules to better mitigate technology risks in the wake of a recent cyber attack which impacted organisations around the world.
The Monetary Authority of Singapore (MAS) now requires all financial institutions to audit the suppliers of their technology vendors.
In a typical audit, third-party suppliers may be asked to reveal their software source codes to uncover flaws, malware or unsafe programming practices.
Suppliers may also be asked to reveal their security measures and how often they monitor cyber risks.
The updated guidelines apply to all banks, payment services firms such as GrabPay and Singtel Dash, as well as brokerage and insurance firms.
Speaking to The Straits Times, Mr Vincent Loy, assistant managing director of technology at MAS, said using an external vendor, which may in turn procure third-party tools, brings significant risks to banking systems.
“Unknown third-party suppliers are what MAS is most worried about… Financial institutions that do not allocate sufficient financial resources may be more open to unknown third-party suppliers,” he said.
The hacking of Texas-based SolarWinds had exposed the data of hundreds of thousands of firms and government entities around the world.
SolarWinds’ IT management tools are common components in the products of many large vendors including Microsoft, FireEye and Cisco Systems.
Mr Tan Yeow Seng, the MAS chief cyber security officer, said financial institutions are increasingly reliant on third-party service providers as they adopt new technologies.
“The revised guidelines set out MAS’ higher expectations in the areas of technology risk governance and security controls in financial institutions,” he added.
Such an audit was previously not required under the MAS Technology Risk Management (TRM) guidelines, although due diligence on technology vendors was a must.
The screening of component suppliers is now clearly spelt out in the revised TRM guidelines, which covers a wide range of topics to help firms fob off and recover from cyber attacks and system failures.
Risks through the use of open application programming interface (API), a code that lets different applications talk to one another, are also addressed in the newly updated TRM rules.
Banks have used APIs to automatically share foreign exchange rates, for example. This has allowed many external developers to build currency conversion apps using the data.
Under the revised TRM rules, financial services firms must vet entities that access their APIs by looking at the nature of their business, cyber security posture, industry reputation and track record.
They must also secure the development of the APIs and encrypt sensitive data transmitted to prevent leaks or hackers injecting malicious codes in the APIs.
In another key change to the TRM guidelines, the board of directors and senior management in financial institutions must vet and approve key technology and cyber-security appointments.
“Organisations that do not have a good cyber-security posture usually do not have board and senior management oversight for IT functions and key appointments,” said Mr Loy, citing findings of the central bank’s own audits.
Last revised in 2013, the TRM guidelines have been updated at a time of increased data sharing that underpins the sector’s digital transformation.
The revision took in feedback from a public consultation in 2019 and other expert engagements.
The guidelines elaborate on the mandatory requirements set out in the MAS TRM notice, first issued in 2013 and which carries a fine of up to $100,000 for non-compliance under the Banking Act.
In the case of a continuing offence, a further fine of up to $10,000 daily may be levied.
