Risk Management for Electronic Banking and Electronic Money Activities - consultative document

March 1998

Introduction

The purpose of this document is to provide considerations for supervisory authorities and banking organisations as they develop methods for identifying, assessing, managing and controlling the risks associated with electronic banking and electronic money.

Electronic payment media are likely to figure importantly in the development of electronic commerce. At the present juncture, the development and use of electronic banking and electronic money are still in their early stages. While providing new opportunities for banks, electronic banking and electronic money activities carry risks as well as benefits and it is important that these risks are recognised and managed in a prudent manner.

The Basle Committee regards the document as an initial step in an ongoing review and discussion of supervisory issues and responses related to technological advances in electronic retail products and services. Given the degree of uncertainty about future technological and market developments, it is important that supervisory authorities avoid policies that hamper useful innovation and experimentation. The document is being distributed to supervisors worldwide with the expectation that it will facilitate the development of appropriate supervisory approaches to the management of risks in electronic banking and electronic money activities.