![]() One European banking group, for example, had to change its entire IT system for financial reporting, since manual corrections led to severe errors when data were submitted to the central data cube. But this technology also brings pitfalls, since the risk of inaccurate data submissions, inappropriate interface protection, and IT instability all increase substantially. This new reporting approach significantly eases reporting for banks, since data need to be provided just once in the prescribed format. Today, we see a huge shift toward using data cubes 1 to interface directly with bank IT and data. In the past, most regulators relied on paper-based or semi-electronic report submissions to manage banks’ risk appetite. The potential impact can be demonstrated by how technology can streamline risk-management compliance. Once the aspiration has been articulated, it can be further cascaded and communicated within the organization. When embedding new technologies into the organization, financial institutions need to determine acceptable levels of risk, develop a set of mitigating actions, and weave all of these elements together into a clear change story to mobilize employees. Establish a new risk strategy and culture In our experience, three key components are equally essential to striking this balance. Institutions will have to balance the benefits of technological advances with the challenges of risk management. Financial institutions that fail to appropriately address technological risks may face significant liability, since the legal and regulatory standards for technology-risk management are becoming increasingly stringent. Before implementing new solutions, institutions need to clearly articulate their risk appetite and then focus on managing that risk by promoting a culture of vigilance and compliance. However, this reliance on technology carries associated risks-reputational, legal, and financial-that have also risen drastically. Indeed, customers had no choice during the lockdown but to migrate to a digital-only world.ĭigital technologies are a major enabler of more efficient, more effective, and thus less risky operations in the financial sector. The current COVID-19 crisis has significantly accelerated the need for financial institutions to adopt innovative technologies. ![]() SeptemBy Henning Soller, Malin Strandell-Jannson, and Marie Wahlers ![]()
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