This is an identity theft whereby Internet hackers trick some naïve customers into revealing their sensitive information such as User ID and password through fake email addresses, through social engineering, or spy ware. The Bank of Thailand has recently issued notifications to address these issues and encourage financial institutions to raise customer awareness of such frauds through education. As stated earlier, financial institutions now take advantage of IT to innovate financial products and services. Such innovation brings to a financial institution new dimensions to traditional risks, which include strategic risk, credit risk, market risk, liquidity risk and operational risk. Therefore, the lack of efficient and appropriate controls may amplify the likelihood of each risk and its impact. Internet banking, e-money and IT outsourcing are good examples that highlight the importance of IT supervision. At this point, may I draw your attention to the next topic which is IT risk-based supervision. 3. IT risk-based supervision  BOT has adopted risk based supervision for the past several years. Supervision objectives: The primary objective of BOT supervision is to encourage FIs in Thailand to conduct banking business in a safe and sound manner and consistent with related laws, rules and regulations. It is also our duties to ensure that supervisory framework is keeping up with demand from the financial community as well as with market innovation, international best/ sound practice; finally, to protect customer rights as well. IT risk-based supervision helps ensure the safety and soundness as well as legal compliance of a FI.

Tarisa Watanagase: Supervisory concerns in an IT environment Speech by Dr Tarisa Watanagase, Deputy Governor of the Bank of Thailand, at the 2nd SEACEN/ Federal Reserve System Course on Electronic Banking and Technology Risk Supervision, Bangkok, 12 May 2005. *  *  *  Financial institutions increasingly rely on technology to do their businesses, as a result, improper management and operation of IT will bring risks to financial institutions. Also, issues associated with IT including technological changes, new threats and vulnerabilities will no doubt affect financial institutions' performance and risk profile. Therefore, it is necessary to integrate IT risks with risk-based supervision in order to obtain a comprehensive risk profile of a financial institution. Today is a good opportunity for me to share with you our thoughts and experiences on Supervisory Concerns in an IT Environment. 1. Overview of current IT environment in the banking sector    The Thai financial institutions have been using IT in their businesses for decades. Initially, IT was used as a supporting tool for banking operations, helping staff do their work faster, more conveniently and with less human errors. Then, along with more advanced technology, many financial institutions now offer their products and services through electronic channels such as internet banking, mobile banking, ATM, etc. These alternative banking channels provide customers much easier and more time-saving ways to do their transactions with banks.   In addition to offering alternative banking channels, financial institutions currently also take advantage of IT to innovate financial products and services.