Learning Objectives:

  • Understand cybersecurity regulation in banking.

  • Explain ESG and sustainable finance regulation.

  • Identify emerging regulatory challenges (crypto, AI, and cyber).

8.1 Cybersecurity and Technology Regulation

Cybersecurity is a growing regulatory concern . Key requirements include :

  • Cyber Risk Management: Establishing frameworks for identifying, managing, and reporting cyber risks.

  • Incident Reporting: Reporting significant cyber incidents to regulators.

  • Third-Party Risk Management: Managing risks from cloud providers and other technology vendors.

  • Digital Operational Resilience: Requirements under regulations such as DORA.

8.2 ESG and Sustainable Finance

Environmental, Social, and Governance (ESG) factors are increasingly integrated into banking regulation . Key developments include :

  • ESG Reporting Standards: Frameworks such as TCFD and GRI.

  • Climate Risk: Assessing and managing climate-related financial risks.

  • Sustainable Finance: Integrating ESG considerations into lending and investment decisions.

8.3 Digital Assets and Cryptocurrency Regulation

The regulation of digital assets is an emerging regulatory challenge . Key considerations include:

  • Classification: Determining whether tokens are securities, commodities, or a new asset class.

  • AML/CFT: Applying AML requirements to crypto-asset exchanges and service providers.

  • Consumer Protection: Protecting consumers from fraud and market abuse.

  • Cross-Border Coordination: Coordinating regulatory approaches across jurisdictions.

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