Digital economy breeds new forms of risks

Reported by: |Updated: April 1, 2019

New forms of risks are emerging in the BFSI scenario, contend CROs of BFSI organizations the Feb issue cover story in Banking Frontiers titled ‘Risk Management for the Digital Economy’. Among these are contextual and relevance risks, which have risen due to the adoption of new technologies. Contextual risk is also about changing regulatory environment, for example, after the introduction of eKYC, most of the BFSI institutions had specially focused on it, and many have designed their entire processes for eKYC. Due to the changes in regulatory environment, the contextual risk has become more prominent.

According to Deepak Patkar, executive vice president and CRO at Magma Finance, the relevance risk is also a crucial risk; most BFSI institutions are adopting new technologies and there is need to measure relevance for it, says he, adding: “In the BFSI industry, managing information in an accurate manner is one of the crucial risks.”

Sanjeev Mattoo, head, Product Control and Risk Policy BAAS at RBL Bank, lists some of the emerging technology risks: “Technology bugs, risk of unprecedented modus operandi intruding into system through cyber/malware attacks, complex ecosystem – stakeholders of varied background, internet, tech companies, start-ups etc.”

Bharat Panchal, senior vice president and head, Risk Management at NPCI speaks about the transformations in the BFSI sector: “Transformation is inevitable, and risk management transformation has the same speed. Risk management needs to align with the increase speed of transformation. Also, it is important to adopt large scale automation. We need to use technologies like AI and ML to match the speed of the transformation.”

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