The European Central Bank (ECB) has plans to independently investigate an incident that affected its TARGET2 real-time gross settlement system on Oct. 23 this year, which resulted in a near 10-hour outage, according to a press release.
An initial probe determined that a software defect in a specific device was what caused the incident, the release stated. The independent investigation will look into the other incidents affecting TARGET Services in 2020, including anything that directly or indirectly affected TARGET2 Securities, which is operated by the Eurosystem.
In addition, the review will let the Eurosystem address the issues and learn from them, looking into the “robustness” of the model for business continuity, the adequacy of regular recovery tests and the efficiency of managing change and the communication protocols, according to the release.
The Eurosystem is dedicated to helping identify lessons from incidents with “full transparency,” the release stated, with the goal being “highly efficient and reliable financial market infrastructures to European agents.”
TARGET2 is the top European platform for processing larger platforms, the release stated. It is owned and operated by the Eurosystem and allows bank submissions from central banks and commercial banks.
Alexandra Maniati, director of Cybersecurity & Innovation with the European Banking Federation, told PYMNTS that the banking industry in Europe is increasingly embracing cloud technologies and had been even before the pandemic.
Maniati said one particular key to the effort is interoperability, with further adoptions of cloud-based solutions able to make data more exchangeable.
“There are at least seven countries in the European Union which already have digital identity schemes — and we would like to see existing efforts be brought together rather than reinventing the wheel.”
She said the collaborations are happening more often between traditional financial institutions and new FinTechs, which shows the need for an “activity-based” model of regulation and governance.