Laws And Ethics Banking Sector In Turkey †MyAssignmenthelp.com

Question: Discuss about the Laws And Ethics Banking Sector In Turkey. Answer: Introduction The banking sector in turkey is governed byBanking Law No. 5411. This piece of legislation defines the various duties and obligations of Bankers towards their customers especially regarding the information provided by them to the bank (Ozkan, Balsari and Varan 2014). Further there is a Code of Banking Ethics that defines the ethical obligations that the bank must observe towards their customers. These regulations together with ethical principles that govern IT data would be employed in the following paragraphs to analyze the dilemma faced by the management of ABCXYZ bank to effectively handle the effects of a cyber attack on its database. Laws applicable to Turkey: Part 7 of theBanking law No. 5411 deals with banks obligations towards the customer. Article 73 of the act defines confidentiality and dictates that banks must hold the information provided by customers with the strictest possible security protocols (Gundogdu 2015). Furthermore, the Code of Banking ethics at Article 3 defines the ethical duties owed by a banker towards its customers. Article 3a defines honesty and necessitates the honest observance of business transactions. Articles 3c and 3d make reliability and transparency an essential in banking relations (Kili 2016). Protection of customer information and consumer accounts would be a part of these ethical obligations. Article 9 of the Code states that customers must be informed of all transactions that involve their account and any material information apart from that must also be disclosed. These security obligations are even more explicitly defined in Article 13 of the Code which deals with security. Thus in the present set of circumstances ABCXYZ bank is in gross breach of its obligations and must disclose all relevant information about the breach to their customers. This also means that any information that they wished to fabricate when disclosing the incident report must be prohibited as it would be a clear breach of their ethical duties towards their customers under Articles 3, 9 and 13. However, the banks are in no way obligated to disclose all relevant information regarding the cyber attack to the media or any person who is not related to/in association with the bank and its transactions. Laws applicable to Australia: In Australia banks are defined under the Financial Services Sector Reforms 1998 as Authorized Deposit-Taking Institutions (ADI). The Banking Act 1959 is the regulating statute for banking authorities and banking transactions (Lgreid 2017). The regulatory body for dealing with banking disputes is the Australian Securities and Investments Commission which was brought into existence by the enactment of the Australian Securities and Investments Commission Act 2001. Part 2 Division 2 of the act deals with consumer protection and makes it a duty of the bank to protect the information provided by their customers with advanced security protocols. Thus had the present scenario arisen in Australia the bank would be in contravention of thislaw and would be liable to compensate their consumers for the negligent handling of sensitive information. Moreover, Australia is bound bycommon law principles and thus has a duty of care towards its customers. As reiterated by Demagogue Pty Limited v. Ramens ky (1992)39 FCR 31 banks have a duty to disclose such information to their customers in its truest form (free from fabrication) and hence not disclosing all the details of such a cyber attach would be breach of their ethical duties under common law. Analysis of similar incidents: The 2014 attack on JP Morgan Chase Co. which was channelled from 90 different servers and affected 76 million households and 7 million small business accounts was very similar to the present case. The company with the aid of the F.B.I tried to track down and prosecute the attackers but were unsuccessful (Jessica Silver-Greenberg 2018). Though there were strong suspicions that the attackers were Russians. The 2017 cyber attack on 8 ATM machines in Russia are another example of such attacks. Here the assailants used a fileless malware to infiltrate and bypass the security protocols thus enabling the attackers to withdraw amounts from accounts owned by customers of the bank. Kaspersky labs however were able to track down the assailants and they were prosecuted (ABC News 2018). Situational Analysis and Recommendation: In light of the described circumstances it would be unwise for the bank to release fabricated information to their customers as it would be a direct breach of their duties under the Banking law No. 5411 and the Code of Ethics and the same would resultantly be illegal. If the true representations of the falsified information became known to the customers the bank would be liable to undergo legal proceedings and would eventually have to pay compensation. However a minimal information report with slightly fabricated or latent information may be released to the press and media and the public at large. This would uphold the idea of reliability which the bank embodies and protect its reputation from harm. Conclusion The best course of action for ABCXYZ has been discussed above. Plus it may also be noted that deviating from that action plan would result in illegal action on behalf of the bank and would leave it open to legal claims. This would invariably lead to exorbitant costs of litigation and compensatory losses. References: ABC News. 2018.Ukraine points finger at Russian security services over cyber attack. [online] Available at: https://www.abc.net.au/news/2017-07-02/ukraine-points-finger-at-russia-for-cyber-attack/8670550 [Accessed 10 Mar. 2018]. Gundogdu, A., 2015. An Analysis on Deposit Insurance of Turkish Banking System by Core Principles for Effective Deposit Insurance Systems. Jessica Silver-Greenberg, M. 2018.JPMorgan Chase Hacking Affects 76 Million Households. [online] DealBook. Available at: https://dealbook.nytimes.com/2014/10/02/jpmorgan-discovers-further-cyber-security-issues/ [Accessed 10 Mar. 2018]. Kili, M., 2016. Online corporate social responsibility (CSR) disclosure in the banking industry: evidence from Turkey.International Journal of Bank Marketing,34(4), pp.550-569. Lgreid, P., 2017.Transcending new public management: the transformation of public sector reforms. Routledge. Ozkan, S., Balsari, C.K. and Varan, S., 2014. Effect of banking regulation on performance: evidence from Turkey.Emerging Markets Finance and Trade,50(4), pp.196-211.