NORTH CAROLINA BANKING INSTITUTE Volume 5 | Issue 1 Article 8 2001 Willie Sutton Is on the Internet: Bank Security Strategy in a Shared Risk Environment Eugene M. Katz Theodore F. Claypoole Follow this and additional works at: http://scholarship.law.unc.edu/ncbi Part of the Banking and Finance Law Commons Recommended Citation Eugene M. Katz & Theodore F. Claypoole, Willie Sutton Is on the Internet: Bank Security Strategy in a Shared Risk Environment, 5 N.C. Banking Inst. 167 (2001). Available at: http://scholarship.law.unc.edu/ncbi/vol5/iss1/8 This Article is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Banking Institute by an authorized administrator of Carolina Law Scholarship Repository. For more information, please contact
[email protected]. WILLIE SUTTON IS ON THE INTERNET: BANK SECURITY STRATEGY IN A SHARED RISK ENVIRONMENT EUGENE M. KATZ* THEODORE F. CLAYPOOLE** TABLE OF CONTENTS I. Introduction ........................................................................... 168 II. Banking in a Shared Risk Environment ............................. 171 A. Traditional Bank Security ......................................... 171 1. Perimeter Defense ........................................ 172 2. The Human Element ................................... 173 B. New Risks from Interconnectivity ........................... 175 1. A Glimpse of the New Environment ......... 175 2. The Shared Risk Security Model ................ 178 a. Defining Financial Services Risk... 180 b. Security Risks Rising ..................... 183 c. Current Legal Gaps ........................ 188 C. Current Supervisory Issues in a Shared Risk Banking Environment .............................................. 191 1. The Shared Risk Implications of Bank-Customer Connectivity ..................... 191 2. Risks to Banks of Increased Interconnectivity .......................................... 193 3. The Impact of Risk-based Supervision ...... 196 4. Guidance from the Basel Committee .......