SocGen failures highlight wider IT risks
Coda warns that other financial services firms could be vulnerable to IT controls failure
The massive losses suffered by Société Générale following the actions of a
single trader have raised concerns that other financial institutions could be
vulnerable to similar failures.
Coda, the IT software group, has warned that in many large financial
institutions compliance and process are ‘too siloed’ and that executives lacked
a single set of controls offering them ‘a comprehensive and complete view of
compliance issues around the business’.
Coda also urged companies to have clear and robust systems in place to
prevent errors and limit system weaknesses.
‘Manual errors are usually to blame for this kind of fraud, so it is
important to have systems in place that require high levels of authorisation and
where security is managed carefully.
‘Automation is the key. Once a compliance process is defined, technology
should be used to automate the process, to ensure that the process is executed
exactly the same way every time,’ Coda said:
Further reading:
Société Générale announces massive write-down – and
fraud
Investigation at SocGen ‘to take
months’
