[OR] [EWB] [E3] [CBS] [1] [SuPS] Identify Severe but Plausible Scenarios

CBS-1 Deposit & Account Services

Introduction

In line with the principles outlined in BSP Circular No. 1203, Series of 2024, and the guidance from the BCM Institute’s Operational Resilience methodology, identifying Severe but Plausible Scenarios (SbPS) is a critical step in ensuring that EastWest Banking Corporation can withstand and recover from high-impact disruptions.

These scenarios represent extreme yet realistic events that could significantly disrupt deposit and account services, affecting customers, financial stability, and regulatory compliance.

The scenarios below are mapped across each Sub-CBS of CBS-1 Deposit and Account Services. They incorporate cyber, ICT, operational, and third-party risks, reflecting regulatory expectations for integrated resilience testing and proactive risk management.

Table P5: Identify Severe but Plausible Scenarios for CBS-1

Sub-CBS Code	Sub-CBS	Severe but Plausible Scenario	Impact / Effect	Proactive Risk Management Action	Link to Integration of Cyber and ICT Risks
1.1	Customer Onboarding and Account Application	Prolonged outage of the digital onboarding platform due to cloud service failure	Inability to onboard new customers; revenue loss; reputational damage	Multi-channel onboarding fallback (branch/manual), cloud redundancy, and onboarding SLA monitoring	Cloud outage, API failure, third-party platform dependency
1.2	Customer Identification and Verification (KYC/CDD)	Failure of the national ID verification system or a KYC vendor breach	Delays in compliance checks, onboarding halt, and regulatory breach risk	Alternative verification methods, periodic vendor risk assessment, and offline KYC procedures	Third-party API failure, data breach, identity service compromise
1.3	Account Approval and Opening	Core banking approval workflow failure due to a system bug or a cyberattack	Backlog in account opening; customer dissatisfaction	Workflow automation recovery scripts, maker-checker fallback, system patch governance	Core banking system compromise, insider threat
1.4	Initial Funding and Deposit Booking	Payment gateway outage during initial deposit funding	Failed transactions, reconciliation issues, and customer complaints	Multiple payment channels, transaction retry logic, and real-time reconciliation controls	Payment system outage, API disruption
1.5	Product Terms Setup and Account Parameter Maintenance	Misconfiguration of interest or product parameters due to a system update error	Financial misstatement; customer disputes; regulatory penalties	Change management controls, configuration validation, automated testing	System misconfiguration, DevOps failure
1.6	Deposit Transactions Processing	Core banking system downtime due to a ransomware attack	Inability to process deposits; liquidity disruption	Data backups, ransomware protection, DR site activation, transaction queuing	Cyberattack (ransomware), system outage
1.7	Withdrawal and Funds Access Processing	ATM and branch withdrawal system outage due to network failure	Customers unable to access funds; panic withdrawals	ATM network redundancy, offline withdrawal limits, and branch contingency procedures	Network outage, ATM switch failure
1.8	Account Servicing and Customer Maintenance	CRM system failure affecting account updates and servicing	Delayed customer requests; service backlog	Manual servicing procedures, CRM backup systems, and staff cross-training	Application failure, database corruption
1.9	Interest, Fees, and Charges Processing	Batch processing failure leading to incorrect interest postings	Financial inaccuracies, customer complaints, and audit findings	Batch validation controls, reconciliation checks, and rollback procedures	Batch job failure, system processing error
1.10	Statement, Passbook, and Balance Reporting	Data warehouse outage affecting statement generation	Customers are unable to access account statements	Backup reporting systems, alternative statement delivery channels	Data warehouse failure, reporting system outage
1.11	Digital Account Access and Channel Integration	Mobile/online banking outage due to DDoS attack	Loss of digital access; surge in branch traffic	DDoS protection, traffic filtering, and failover infrastructure	Cyberattack (DDoS), channel integration failure
1.12	ATM and Card-Based Access Management	Card management system compromise leading to unauthorised transactions	Fraud losses; customer trust erosion	Fraud detection systems, card blocking protocols, and real-time alerts	Card system breach, cyber fraud
1.13	Account Reconciliation and Exception Handling	Failure of the reconciliation engine leading to unmatched transactions	Financial discrepancies; audit and compliance issues	Automated reconciliation tools, exception dashboards, and manual review escalation	Data integrity issues, processing errors
1.14	Dormancy, Holds, Restrictions, and Account Control Administration	Incorrect account restriction due to a system logic error	Customer access blocked; complaints and legal exposure	Rule validation, exception handling, and audit trails	System logic error, access control failure
1.15	Fraud Monitoring and Transaction Surveillance for Deposit Accounts	Failure of the fraud monitoring system during the peak transaction period	Undetected fraudulent activities; financial loss	AI-based fraud analytics, redundancy in monitoring tools, and escalation protocols	Cyber fraud, monitoring system failure
1.16	Complaints, Disputes, and Service Recovery	Contact centre outage due to telecom disruption	Inability to handle customer complaints; reputational damage	Multi-channel support (chat/email), telecom redundancy, crisis communication plan	Telecom failure, service platform outage
1.17	Regulatory Reporting and Compliance Monitoring	Regulatory reporting system failure during the submission deadline	Non-compliance penalties; regulatory scrutiny	Backup reporting tools, regulatory buffer timelines, and compliance monitoring dashboards	Reporting system outage, data integrity risk
1.18	Incident Response, Business Continuity, and Recovery	Failure of the disaster recovery site during a major outage	Prolonged service disruption; systemic impact	Regular DR testing, alternate recovery sites, and crisis management escalation	DR failure, infrastructure resilience gap

Regulatory Alignment and Observations

Consistent with BSP Circular No. 1203, the above scenarios reflect key regulatory expectations, including:

Identification of severe but plausible disruptions across critical services
Integration of cyber and ICT risks into operational resilience planning
Demonstration of proactive risk management and preparedness measures
Ability to test response and recovery capabilities under extreme scenarios

Examples of regulatory alignment include ransomware attacks on core banking systems, third-party service failures (e.g., KYC vendors), and large-scale digital channel disruptions, all of which are explicitly highlighted as priority risk areas for Philippine banks.

Banner [Summing] [OR] [E3] Identify Severe but Plausible Scenarios

The identification of Severe but Plausible Scenarios for CBS-1 Deposit and Account Services enables EastWest Banking Corporation to anticipate, prepare for, and respond effectively to high-impact disruptions.

By aligning these scenarios with regulatory expectations and embedding cyber and ICT risk considerations, the bank strengthens its overall operational resilience posture.

These scenarios also provide a critical foundation for subsequent stages, including scenario testing and resilience validation, ensuring that the bank can continue delivering essential deposit and account services even under extreme but credible stress conditions.

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