Payment outages: Experiences and issues

Tanai Khiaonarong, Ryan Rizaldy and Harry Leinonen
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Tanai Khiaonarong: Senior Financial Sector Expert, International Monetary Fund, USA
Ryan Rizaldy: Director, Central Bank of Indonesia, Indonesia
Harry Leinonen: Chief Executive Officer, PSS Consultancy, Finland

Journal of Payments Strategy & Systems, 2022, vol. 16, issue 2, 170-180

Abstract: Major operational incidents in payment systems suggest the need to improve their resiliency. As payment infrastructures become more digital, integrated and interdependent, with users demanding real-time and uninterrupted services, a higher degree of resilience is required. Risks that could trigger major disruptions have become more acute given the rise in power outages, cyber incidents and natural disasters. International experiences suggest the need to strengthen (1) reliability objectives, (2) redundancies, (3) assessment of critical service providers, (4) endpoint security and (5) alternative arrangements. A comprehensive restructuring of resiliency plans — across the entire payment value chain — is also needed. This paper draws lessons from recent operational incidents to suggest ways in which operational risk management frameworks could be strengthened given evolving payment systems, increasing user expectations, developing technologies and varying country circumstances. The objective is to share observations from international experiences and explore operational and developmental issues to facilitating the stronger operational resilience of existing and future payment systems.

Keywords: operational resilience; payment systems; risks; disasters; business continuity (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2022
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