Acquiring ISO 20000 certification in 2007
With its IT vision, dubbed "IT Service Innovation for the Sake of the Central Bank's Capacity Strengthening," the Bank of Korea (www.bok.or.kr) is striving to carry out IT affairs innovation.
As the name for this vision shows, the Bank of Korea (BOK)'s IT Department is concerned about how it can effectively manage IT in the interests of strengthening capacity at the BOK, the central bank of the Republic of Korea.
In conjunction with this, Director General Park Hyun-duck of the bank's Information Technology Department notes in an exclusive interview with The Korea IT Times: "The department has established four strategic goals to accomplish this vision." According to Park, the most important strategic goal is to reinforce the bank's capacity to support its own economic research activities and monetary policy. Since among the roles of the BOK, monetary policy and research on the economy have the most effect on national economic life, the department is placing greatest emphasis on the provision of support from the IT side in these areas.
The next strategic goal is stable operation of the real-time gross-settlement system, named BOK-Wire. Since this system's influence on the financial market as well as the nation's stability is very great, Park says, the IT Department is focusing on stable operation of this system as its second strategic goal. Finally, the director general explains, the department is carrying out "IT capacity strengthening and service function innovation" and "internal administration innovation support" as its additional two strategic goals.
For IT capacity strengthening and service function innovation, among other things, the department is engaged in IT affairs innovations including IT affairs process innovations. Its objective is to acquire ISO 20000 certification, the international standard for IT services, during 2007.
All about IT risk management
The influence of the Bank of Korea's information systems on the domestic financial market is very great. Hence, Park adds, the IT Department devotes considerable resources to IT risk management to secure system stability.
One of several BOK internal regulation and information systems for IT risk management is the Operation Monitoring System, which the director general explains carries out real-time monitoring of all other BOK systems as well as the telecommunication network operations. If an obstacle is caught during the course of normal operation, the monitoring system notifies the person in charge immediately via cellular phone so that adequate measures may be promptly taken in response.
At the same time, the BOK operates an IT Risk Management System, to discern in advance all sorts of IT risks latent in the computer equipment and telecommunication networks and take risk-mitigating measures. This system contains a Diagnosis Checklist to identify risks in IT-related operational and administrative processes. Based upon this checklist, the IT Department regularly diagnoses and assesses risks. Then, with the result of diagnoses, Park says, the department takes measures to further minimize IT risk.
This year, the Bank of Korea has undertaken diverse projects, and some projects are under way at present. In terms of information system construction, a Management Information System was launched in April, 2006, to systematically integrate BOK general management affairs such as personnel, asset, and budget management.
In September 2006 a Website for Economic Education was launched, for the purpose of helping the population of the nation as a whole, as well as elementary, middle and high school students, to understand economics easily.
The bank is also constructing a Monetary Policy Support System, to support monetary policy operations such as interest rate decisions. On the infrastructure side, the BOK has driven forward a combination hardware and software upgrade of its main frame system, which serves as the basic equipment of the payment settlement system for the bank.
How to effectively cope with IT efficiency
When asked about the effect of informatization and the outlook for the years ahead, Director General Park states: "It is not easy to quantitatively assess the effects of informatization, because differently from commercial financial institutions the Bank of Korea operates its information systems based upon the public interest."
By constructing and operating the basic infrastructure of our country's payment and settlement system, the Bank of Korea gains outcomes on the macroeconomic side such as stimulation of domestic financial transactions and an increase in stability, he explained. The National Funds Real-Time Electronic Transfer System, as one example, has not only greatly reduced the National Treasury affairs burdens of the BOK and the domestic commercial banks, but also contributed to an epoch-making improvement in national fund payment services, with the nation as a whole being the beneficiary.
In addition, the BOK is constructing and operating systems which collect and process all sorts of economic information, such as economic statistics, foreign exchange information and financial dealing information. The data produced through these systems is utilized as important material not only by the BOK, but also by government institutions like the Ministry of Finance and Economy.
That is, Park states, these BOK IT systems discharge functions as important parts of the information infrastructure contributing to our nation's economic development. Concerning the difference between the Bank of Korea and commercial financial institutions in terms of IT practices, the director general said: "In its IT operations, the BOK also attaches importance to the systems' public impact and stability, because in all affairs the BOK handles the effect on the national economy at large is very great."
To drive forward a long-term program of detailed annual IT projects, Park says, the Bank of Korea has established a 7th Information Strategy Plan (ISP), to be carried out from the second half of 2006 through the end of 2009. The plan comprises a total of 12 tasks in the three areas of application systems, information infrastructure and IT administration. In wrapping up his interview with The Korea IT Times, Director General Park points out: "Domestic financial institutions are facing tough competition and rapid technological change, and they need to improve their IT operations efficiency."
The Bank of Korea has also been very concerned about how these tasks domestic financial institutions now face can be coped with effectively. It thus arranged the 'IT Conference for Financial Institutions' on Nov. 17, 2006, for the first time in Korea, to offer an opportunity for thinking about such tasks, he says.
