SET Training - Banking and Fintech

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...