Risk

To save time, money, or both, many of us have the tendency to re-purpose tools and processes for something they weren’t originally intended for. Depending on the circumstances, this approach sometimes works … Take, for example, a client who uses a system called Jira designed for facilitating IT help requests. With a few tweaks, this client was able to re-purpose this system for work requests for other (non-IT) departments in the company. Of course, there is nothing wrong with being creative with tools like this – provided it gets the job done in an effective and ethical way. But oftentimes, this sort of “re-purposing” can be like trying to make a square peg fit into a round hole, therefore leading to wasted time and resources. One area where this is especially pr...

Despite more fraud and crypto crime, firms’ op risk losses fall in number and in volume. Data by ORX News The largest op risk losses of 2021 by sheer mass occurred in the hinterland of institutional finance – the world of cryptocurrency trading – where two mega-heists of more than $2 billion apiece, perpetrated on retail investors, topped the charts. While these losses ultimately accrue to the retail platforms themselves as the parties liable to make good their customers – and while they form part of the rolling loss tallies compiled by ORX News – they do not feature in Risk.net’s main summary of Read more: https://bit.ly/3flyCth

The CCP’s models are falling short time and time again, and the consequences could be disastrous As the saying goes: third time’s a charm. Except this isn’t the case for the lynchpin of the US equity markets, the National Securities Clearing Corporation (NSCC). Between January and March last year, the central counterparty (CCP) was caught $600 million short of its Cover 1 obligation. Simply put, it didn’t have enough liquid resources to cover the default of its largest clearing member in an extreme-but-plausible stress scenario. Had the worst happened, members would have had to plug the hole to avoid the clearing house’s collapse. Luckily, and despite a frenzy of activity driven by the meme-stock volatility that unfolded in Q1, the worst didn’t happen. Good news all rou...

Data security is essential for all businesses, but its criticality is increased manifold in the financial sector. Financial Institutions (FIs) have access to private details of their clients to a level comparable only to the healthcare sector. A lapse in data security or a leak of confidential information can cause significant losses for both FIs and their clients. The losses are not limited to reputational damage, sensitive and confidential information, if leaked, can result in financial damage to the clients and the financial institutions involved. Risk and compliance technology can help FIs ensure the security of both their database and the risk and compliance platform. Risk and compliance technology discussions mainly focus on the improvements that can be expected in risk and c...