Ireland: Central Bank Publishes Cross Industry Guidance In Respect Of Information Technology And Cybersecurity Risks


Following several inspections, thematic reviews and ongoing supervisory engagements throughout the course of 2015 and 2016, the Central Bank of Ireland (the "Central Bank") has on September 13, 2016 published Cross Industry Guidance in respect of Information Technology and Cybersecurity Risks (the "Guidance").

The Guidance applies to all regulated firms in Ireland and follows a September 23, 2015 Central Bank letter to industry communicating the results of its thematic inspection in relation to cybersecurity and the related operational risks across investment firms, fund service providers and stockbrokers.

The Guidance highlights that, based on the Central Bank's supervisory experience to date, firms are not implementing sufficiently robust IT systems and controls and must increase their capability to deal with IT failures and cybersecurity incidents in order to minimise any potential impact on their business and reputation.

For most firms in the financial services sector, IT is a core aspect of the functioning of the business, with most (if not all) key functions supported or run by IT. The Central Bank highlights a number of inadequate practices, namely a lack of prioritisation, a lack of awareness and a lack of understanding of IT and cybersecurity related risks and point out that more attention is required at both senior management and Board level to ensure that these risks are managed effectively. The Central Bank also identifies a number of recommended practices as set out below:

(i) Board of Directors and Senior Management Oversight of IT and Cybersecurity Risk

The Central Bank expects firms to develop and document a comprehensive Board approved IT strategy which is aligned with the overall business strategy with sufficient staff and financial resources allocated to the strategy to ensure it can be executed efficiently. The Central Bank also recommends that a well-defined, comprehensive and functioning IT risk management framework is implemented.

The Guidance emphasises the need for the Board to receive updates on key IT issues, including major IT projects, IT priorities and significant IT incidents as well as regular reports on key IT risks. Board members and senior management are also expected to possess sufficient knowledge and understanding of the IT risks facing firms and take steps to ensure that these risks are well understood throughout the firm.

(ii) IT Specific Governance

The Central Bank recommends that firms should ensure that documented policies, standards and procedures which address the identification, monitoring, mitigation and reporting of firms' IT related risks are in place and that the roles and responsibilities in managing IT risks are clearly defined, documented and communicated to relevant staff. In addition, a sufficiently senior person in the firm should be appointed with responsibility for IT and cybersecurity matters. The Central Bank recommends that these policies and procedures are reviewed and updated on a regular basis.

(iii) IT Risk Management Framework

The Central Bank expects that firms develop, implement, maintain and communicate an IT risk management framework, which should facilitate a comprehensive review of IT risks, encompassing risk identification, assessment, monitoring and testing of its effectiveness and set out staff and senior management responsibilities and accountability.

The Guidance provides that risk assessments should be carried out on a regular basis, considering both internal and external sources of risk and firms should maintain an inventory of all IT assets within the firm. Particular consideration should be given to the risks associated with the continued use of older IT equipment/infrastructures. An up-to-date list of identified IT risks should be developed and maintained by firms and the Central Bank should be notified in circumstances where an IT incident has a significant adverse effect on the firm's ability to provide adequate services to its customers, its reputation or its financial condition. The effectiveness of IT controls should be subject to a periodic and independent review and, where warranted, given the nature and scale of the firm, penetration testing should be carried out.

(iv) Disaster Recovery and Business Continuity Planning

One of the issues raised by the Guidance is that a high reliance on IT for critical business operations exposes firms to the risk of severe disruption. Firms should ensure that documented disaster recovery and business continuity plans are in place and that sufficient resources are provided to support effective planning, testing and execution of same.

The Central Bank expects firms to consider a range of plausible event and disaster scenarios, including cybersecurity events and must have in place a documented back-up strategy for critical data and conduct regular back-up and restore tests to verify the restore capabilities for critical systems.

The Central Bank expects that the Board is provided with updates on the various scenarios considered and the development and testing of the disaster recovery and business continuity plans.

(v) IT Change Management

The Guidance outlines that firms are expected to have in place adequate systems to manage the change/upgrade/replacement of IT systems, including having approval requirements in place.

It is also recommended that IT project plans are clearly documented and periodic updates should be provided to the Board detailing the progress of any significant IT projects.

(vi) Cybersecurity

The Guidance states that cyber-attacks are becoming more sophisticated and difficult to detect. Current technological trends (such as cloud computing and mobile devices) further increase exposure to cyber risk. Firms are required to have in place a documented strategy to address cyber risk, which is reviewed and approved at Board level.

The Central Bank recommends that training programmes are implemented to enable staff to identify good IT security practices, common threat types and familiarise themselves with the firm's policies and procedures regarding the appropriate use of applications, systems and networks.

The Central Bank provides that, at a minimum, cyber risk management should address the identification, prevention and detection of security events, threats and incidents, security incident handling and recovery planning after an incident. Firms should also have in place a documented cybersecurity incident response plan which provides a roadmap for the actions the firm will take during and after a security incident.

The Central Bank should be notified in circumstances where a cybersecurity incident has a significant adverse effect on the firm's ability to provide adequate services to its customers, its reputation or its financial condition.

(vii) Outsourcing of IT Systems and Services

The Guidance states that regulated firms are becoming increasingly reliant on outsourcing IT services to external service providers. Outsourcing does not reduce the risks associated with IT and the Central Bank points out that the responsibility for the effective management of these risks remains with the regulated firm. Therefore firms are required to ensure that a framework is in place with clear lines of responsibility for ongoing management, operational oversight, risk management and review of the firm's external service providers.

The Central Bank expects to conduct thorough due diligence on any potential service providers, to include consideration of their technical capabilities, performance track record, financial strength and viability, service quality and reliability. In circumstances where any IT services are outsourced, the contract between the firm and the service provider should include a Service Level Agreement detailing sufficiently robust provisions in relation to security, service availability, performance metrics and penalties.

The Guidance also outlines the requirement to have in place an exit management strategy to reduce the risk of disruption in the event that key outsourced IT services are unexpectedly withdrawn by the service provider or terminated by the firm.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions