SET Training - Banking and Fintech

By Stanley Epstein -  Introduction: More Than Just a Digital Nuisance When a cyberattack brought production at Asahi, one of Japan’s largest brewers, to a halt, the consequences were felt in local beer halls running out of popular lagers. Similarly, when hackers struck carmaker Jaguar Land Rover, assembly lines fell silent, costing the company millions per week. These incidents reveal a critical truth: cybercrime is no longer an abstract IT problem. It is a tangible force that can halt manufacturing, disrupt supply chains, and affect the availability of everyday consumer goods. While carried out by different criminal groups, many of these disruptive attacks share a common feature: the use of ransomware to paralyse a business and extort payment. The threat has evolved in sophisticated and surprising ways, and this article explores the most impactful new realities of the modern cybercrime landscape. Takeaway 1: Your Boss Is Calling—Or Is It? The Rise of AI-Powered Deception Artifici...

Introduction: The "White Elephant" in the Room For any manager tasked with monthly reporting, the process is painfully familiar: hours spent pulling data from disparate sources, struggling to create a connected view, only to produce a static report that's outdated the moment it's finished. In response, organizations have built countless dashboards promising a real-time, data-driven view into every corner of the business. Yet, many of these meticulously crafted tools end up as digital "white elephants"—expensive assets that consume time and money but sit unused, providing little to no real value. The core problem isn't the technology, the choice of chart, or the color scheme. The difference between a high-value dashboard and a digital paperweight lies in the strategic framework behind it. A dashboard's success begins long before the first line of code is written and continues long after it has been launched. There are five counter-intuitive but critic...

Risk management, when aligned with business objectives, becomes a powerful strategic tool rather than a mere compliance function. Organizations that integrate risk management into their strategic framework can proactively identify potential threats, capitalize on opportunities, and ensure long-term sustainability. This article explores how businesses can achieve this alignment for greater impact and resilience. 1. Integrating Risk Management into Strategic Planning Risk management should be an integral part of strategic decision-making rather than an afterthought. Organizations should: Conduct comprehensive risk assessments during strategic planning. Align risk priorities with corporate goals to ensure balanced risk-taking. Use risk intelligence to enhance forecasting and decision-making. By embedding risk management early in the planning phase, businesses can anticipate potential pitfalls and develop contingency strategies that support growth. 2. Defining Risk Appetite and Tolerance A...

Introduction Internal controls are foundational elements within any organization, intended to provide reasonable assurance that processes operate smoothly, risks are minimized, and objectives are achieved efficiently. Leaders depend on these controls to function as a reliable safeguard, trusting that they’re well-designed, correctly installed, and actively maintained. Yet, a recurring pattern emerges through countless audits: controls inevitably break down over time. This breakdown can arise from various factors, including changing organizational priorities, rapid technological advancements, staff inexperience, or simple human error. Without ongoing attention and diligence, even the most robust control frameworks are vulnerable. Such failures not only expose the organization to potential risks but also create an opportunity for improvement when properly addressed. Auditors and compliance professionals are instrumental in diagnosing control breakdowns and recommending solutions to mitig...

Introduction In an age where we’re constantly surrounded by “experts,” it’s natural to wonder: how much do they really know? We see experts making predictions, giving advice, and influencing decisions in almost every aspect of society—from economics to medicine to psychology. Yet, it often feels like their conclusions can be as variable as the weather, leaving us to question their credibility. Are experts truly experts, or is their authority overestimated? In a world where information is easy to access but difficult to validate, distinguishing between genuine expertise and overconfidence is more crucial than ever. This article explores what expertise is, how it varies across disciplines, and why a healthy dose of skepticism can be valuable when navigating fields marked by high levels of uncertainty. By understanding what constitutes expertise—and where it can falter—we can make better-informed decisions and cultivate a balanced view of expert opinions. The Nature of Expertise: Stabilit...

Introduction In a world that champions optimism, the idea of focusing on potential pitfalls might seem counterproductive. Yet, when it comes to managing risks, particularly operational risks in sectors like banking, adopting a mindset that anticipates problems rather than avoids them can be a powerful tool. While the phrase “Positive Power of Negative Thinking” may resonate with those who remember psychologist Julie Norem’s 2002 book by that name, our use of the concept here differs significantly. Norem’s work on “defensive pessimism” illustrated how anticipating challenges could improve personal resilience and performance. But in risk management, this strategy extends further, creating a proactive framework for anticipating, assessing, and mitigating potential threats. This approach—thinking critically about what could go wrong—has proven indispensable in my own journey within risk management since 1991. The fundamental idea is that by rigorously identifying everything that could go w...

Strategies for Risk Professionals to Navigate an Uncertain Global Landscape Introduction In an era of unprecedented global change, the convergence of political, economic, and social dynamics has given rise to new challenges for businesses across the globe. Geopolitical risks, once considered peripheral concerns, are now central to corporate strategy and risk management. Companies, regardless of size or industry, must navigate a complex and often volatile geopolitical environment. Whether it's trade wars, sanctions, political instability, or climate change, the ripple effects of these global events can significantly impact operations, supply chains, and profitability. Mastering geopolitical risk management is crucial for professionals tasked with safeguarding organizational assets and ensuring long-term stability. This article offers an in-depth exploration of how risk professionals can identify, evaluate, and mitigate geopolitical risks. Through the use of theoretical frameworks a...

Every organization, from a bustling startup to a well-established corporation, navigates a sea of uncertainty. This uncertainty manifests as risk, the potential for events to disrupt operations and impact success. But not all risks are created equal. Understanding the difference between operational risk and strategic risk is crucial for effective risk management. Operational Risk: The Engine Room Imagine the engine room of a ship. Here, a network of pipes, valves, and machinery keeps the vessel moving. Operational risks are like leaks, malfunctions, or human error in the engine room. They arise from the day-to-day functions of a business and can disrupt its core operations. Examples: System failures (IT outages, power disruptions) Human error (accidents, negligence) Compliance issues (regulatory violations) Third-party disruptions (supplier delays, transportation problems) Natural disasters (floods, fires) Operational risks tend to be more frequent but have a lower impact on the organi...

Artificial intelligence (AI) is revolutionizing businesses, but along with the benefits come significant risks. Here are 8 top risks to consider before diving into the world of AI: 1. Biased Algorithms, Unequal Outcomes: AI systems learn from data, and biased data leads to biased algorithms. This can perpetuate discrimination in areas like hiring, loan approvals, or criminal justice. How it Happens: Biased training data can reflect societal prejudices or incomplete information. For example, an AI resume screener trained on past hires might favor resumes with keywords used by a specific demographic. Mitigate it: Scrutinize training data for bias, ensure diversity in data sets, and implement human oversight in critical decision-making processes. Tell-Tale Signs: Unexplained disparities in AI outputs across different demographics. 2. Job Automation Anxiety: AI can automate tasks, leading to job displacement. While new jobs will be created, there's a fear of a skills gap leaving so...

Check out all my latest POSTS on banking, fintech, payments, risk management, AI and more on my LinkedIn page HERE Read my latest Articles at ' Stanley's Musings'  by clicking HERE     For details of my training courses click HERE

Thoughts on fintech, banking, payments, risk management, AI, going green, economics, business and much more… The latest edition is now available - HERE

In 'The Unhackable Internet' veteran banking attorney and regulator Tom Vartanian argues for replacing today's Internet with a new, more secure network for financial business. Is he crazy — or a prophetic Cassandra for the age of digital money? Read all about it HERE .

Our Report:  The   US, UK, and 16 other global partners have released new guidelines to “make AI safe by design” using third-party testing and a bug bounty program.   Key Points: The UK, the US, along with international partners from  16 other countries (including Germany, Italy, Israel, Singapore & more), have signed a 20-page document  to create AI systems that are “safe by design” The guidelines build upon the U.S. government's ongoing efforts to ensure  new tools are tested before public release, addressing societal harms such as bias, discrimination, privacy concerns— and setting up clear ways for consumers to identify AI-generated material. The commitments require companies to  facilitate third-party discovery and reporting of vulnerabilities in their AI systems through a bug bounty system  (get ready devs, it’s time to make a tonne of cash). On the matter, the  US cybersecurity agency said:   "The approach prioritizes ownershi...

As the use of ChatGPT and other large language models become more prevalent, there will be trouble. Forrester says eight neobanks and two large traditional banks will run afoul of regulators and consumers in 2024. Tightening up controls and compliance with those controls is a key starting point. Read more HERE .

Federal Reserve Bank governor Michelle Bowman says that the use case for a central bank digital currency (CBDC) in the US remains unclear. In a new roundtable speech at Harvard, Bowman says that there may be alternatives to CBDCs that already solve the same issues that a digital dollar purports to address. Read the full article HERE .