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Banks should gear up to manage digital risk
August 16, 2023
The tremendous stride of the banking industry towards digitalisation to cope with rising competition has certainly enhanced financial service accessibility, but this also carries several risks.
In a bid to understand the risk involved in rampant digitisation and explore mitigation strategies, the Mumbai Chapter of PRMIA (Professional Risk Managers’ International Association) brought together banking stalwarts and technology experts for a detailed discussion.
Partha Ray, Director, National Institute of Bank Management, cited the changes in the composition of the Dow Jones Index during the last 140 years.
In 1884, he said the index comprised primarily railroad companies; it had primarily manufacturing companies in 1956. Further, in 2019, the Dow Jones Index consisted mostly of financial and technology companies, including JP Morgan, Goldman Sachs, Apple, Microsoft, Intel, and Cisco.
He mentioned the popular phrase 3-6-3 for bankers. It was supposed to mean that bankers take deposits at 3 per cent, lend them at 6 per cent, and go to the golf course at 3 p.m.
However, he said traditional banking has now changed, and the 3 p.m. golf has become sleepless bankers playing Digital Golf at 3 a.m.
Justin McCarthy, CEO of PRMIA, said the banking sector should accept cyber risk and have a robust plan to manage it.
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