Time to regulate banks' Internet activities?

The Web can be an unruly and confusing place for a bank to do business, internally and externally, but you pretty much have to embrace it these days. That's where all your customers and employees want to be.

One expert tells Forbes: "There's also a level of chaos underneath all of this. It's of deep concern to us that a bank comes in and says they want to put everything on the Internet. There's no regulation of that. And at some point bandwidth may reach a limit. What if it fails? If we put all our eggs in one basket, it has some impact. Someone needs to be involved and create some rules."

So there are two issues here. The first is a potential meltdown of the Internet. Could that really happen? Some experts definitely think so. Well, most people assume it will always be business as usual and that higher-bandwidth services, like 4G, will open up. But a big reckoning--perhaps one that will play out over time--could be on the way. All a bank can really do is protect itself.

This raises the other issue. Is there a need for federal rules to guide development of secure systems, mandating firewalls and encryption and a host of other security measures? To be sure, some vendors would like to see that. Already, however, the FDIC (Federal Deposit Insurance Corp.) and OCC (Office of the Comptroller of the Currency) regulators are taking a keen interest in IT when they examine banks. Perhaps some best practice guidelines would be the place to start.

For more:
- here's the Forbes interview

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