colleague gerry cross, director of policy & risk, addressed this conference last year on the topic of it and cybersecurity10 and this topic remains high on our list of priorities. the central bank will continue to enhance and develop its approach to it risk. our supervisory approach and capability has developed considerably in the last few years, and we now have a dedicated it risk inspection team that will cover all sectors in 2018. while this is still a relatively small team – particularly compared to the resources applied by regulated firms – we are still identifying material issues in too many firms. of all the risks facing the financial system in ireland today, it resilience and security are still the risks that concern me most. we are ever more dependent on it, but threats abound, are increasing in complexity and the potential impacts are massive – and could impact on the financial system ’ s ability to deliver its core functions overnight. there is still, therefore, much to be done to increase the resilience and security of it systems. financial innovation / “ fintech ” continues to grow in importance and also presents very real threats to incumbent business models. our approach to, and engagement on, this will be further developed in 2018. i mentioned data and analytics earlier. as our approach continues to develop and evolve, we must be able to rely on the information receive. we continue to find significant issues regarding the oversight, control and delivery of regulatory returns data. accurate, timely and verifiable data 5 / 7 bis central bankers'speeches is a prerequisite for effective analytics and compliance officers have a direct role in ensuring it is provided to the central bank. significant investment is required in information technology and the supporting processes to make sure this is happening. outsourcing outsourcing is a key part of many financial services firms, whether this is to group companies or to third parties and it is clear that there are sizeable benefits to appropriately managed and delivered outsourcing arrangements, including cost savings and increased expertise. however, outsourcing also creates additional risks and with the continued growth of the international dimension to ireland ’ s financial services industry, including relating to brexit, the tendency to increase the level of outsourcing is something that we in the central bank are very mindful of. outsourcing will therefore continue to be a supervisory priority. building on the work undertaken in recent years, we will be undertaking firm - specific, sector - specific and cross - sector work to obtain a holistic

ed sibley : central bank of ireland's financial regulation functions restructure, relevant issues this year and forthcoming priorities address by mr ed sibley, deputy governor of the central bank of ireland, at the association of compliance officers of ireland ’ s ( acoi ) annual conference, dublin, 10 november 2017. * * * introduction good morning ladies and gentlemen. i am delighted to be here at the association of compliance officers of ireland ’ s ( acoi ) annual conference. thank you for the invitation to speak here today1. it is the second time this year that i have spoken at an acoi event, which i hope is evidence of how important i consider the role of compliance to be to our mandate of safeguarding the stability of the financial system and protecting consumers. when i spoke at your event in march2, i covered, among other topics, my expectations of compliance officers. this warrants repeating. my comments today will also cover the recent restructure of the central bank ’ s financial regulation functions, a summary of relevant issues arising from our work in 2017, and some of our priorities for 2018. central bank restructuring of financial regulation on the 1 september 2017, the central bank ’ s financial regulation function was split into two distinct pillars : prudential regulation and financial conduct. the restructuring reflects the critical and equal importance of both our financial stability and financial conduct mandates, the ongoing evolution and increasing complexity of ireland as a financial services centre, and a strengthening of our approach to conduct supervision, over and above our longstanding work on, and commitment to, consumer protection. the two pillars, led by me as deputy governor, prudential regulation, and by derville rowland as director general, financial conduct, are working as equal partners to drive delivery of our mandate of safeguarding stability and protecting consumers ; and that vision of a financial services sector that serves the needs of the economy and its customers over the long term. the new structural arrangements are designed to enhance how we operate as one bank, recognising the interlinkages, dependencies and need to challenge each other across financial stability, prudential regulation and financial conduct disciplines. as the governor of the central bank has stated3 “ measures applied to protect consumers range from working to ensure financial stability, through prudential and macro prudential regulation, supervision and enforcement to [ provision of ] personal financial information. ” approach to prudential regulation delivery of this vision of financial services in ireland requires that regulated firms