Technology Risk & Operational Risk
A guest post by Shannon Harris, Cefpro
Multiple industry experts have commented on the changing environment within financial services with particular emphasis on technology. Of course, it’s no surprise that many financial institutions have now incorporated new technologies within their business plans. But the question remains of how does this impact risk management?
Technology and cyber risks are an ever-expanding area as professional’s battle against a continual wave of attacks, fraudsters and criminals. In this changing landscape how can risk professionals ensure that technology brings enhancements to the business without compromising security? In a landscape where technology is driving businesses and consumers require increased digital advances, institutions run the risk of falling behind competition if they don’t continue to evolve.
With advances in technology come weaknesses, but also advances in fraudsters’ efforts, meaning innovation must be managed effectively to balance risk versus reward. Below are just some of the points identified from our research pertaining to cyber and technology risk:
“There is a lot more innovation in the industry and new players coming into the market providing technology. Some might say that’s mitigating risk and others would say that’s introducing new risks”
“Fraudsters are finding new ways to infiltrate organizations and the volume of cyber-attacks is rapidly increasing. Banks are under pressure to mitigate that ongoing threat. So what controls do you have in place? Do you have function units and robust controls to push it back?”
“I think regulators are pretty skeptical about cyber security and infrastructure security perspective. They have given guidelines and provided instructions to how to secure it. But the problem is when you’re activities get outsourced it becomes difficult to understand and keep constant monitoring on how things will function. Especially ones that are not regulated or regulated in another region or country”
The research allowed us to glimpse into the inner workings of multiple financial institutions and identify the main topics that were causing concern. In this generation of risk managers, there is an essential need to keep ahead of the curve, keeping one eye on today’s risks whilst also looking to the potential threats of tomorrow.
Understanding the current threats now could assist in accurate predictions of future issues and obstacles. Although in this rapidly changing environment figuring out impending and future risk is no easy venture.