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Invite colleaguesA new season in the risk landscape: Connecting the advancement in technology with changes in customer behaviour to enhance the way risk is measured and managed
Abstract
The risk management puzzle is becoming more multifaceted with increased focus on geopolitical risks, regulatory changes and new participants entering the financial markets, including Fintech and non-regulated bank-like entities. Customers are also changing their behaviour with the evolving market environment and launch of new financial products and applications. In parallel, the technology scene and IT capabilities have advanced significantly, providing opportunities to create tools that can enhance the way risk is measured and managed. In this new and highly dynamic environment, how can banks best manage risk? A complex challenge is present with numerous paths and buzzwords such as Blockchain, machine learning and robotic process automation (RPA) to navigate. The industry, including the risk management function, needs to embrace the technical environment and recognise both its potential and its limitations. Technology enhancements benefit from a holistic view, combining subject matter expertise across multiple areas. Even the smartest cognitive system requires oversight to ensure relevance of data and the patterns observed to make business decisions. Market movements and concentrations may be ascribed to artificial intelligence and machine learning models going forward, and risk managers need to be able to navigate this space and manage the underlying risk factors. Connecting the dots and recognising that risk comes in multiple shapes and form, it can still be identified along with preventative actions.
The full article is available to subscribers to the journal.
Author's Biography
Cecilia Gejke is a risk manager who gained a background in material physics before joining the world of finance and risk management. She has a broad experience from North American, European and Nordic financial institutions, where she has worked across the various risk disciplines and regulatory regimes with a focus on capital, liquidity, and balance sheet management and strategy with holistic stress testing as a favourite tool.
Citation
Gejke, Cecilia (2018, March 1). A new season in the risk landscape: Connecting the advancement in technology with changes in customer behaviour to enhance the way risk is measured and managed. In the Journal of Risk Management in Financial Institutions, Volume 11, Issue 2. https://doi.org/10.69554/OFID2803.Publications LLP