Jim discussed operational risks to financial institutions in forum of industry operations and risk managers and regulators in Germany.
Emerging areas of focus to mitigate operational risk in the financial services industry: First, an increasingly digitalized world, the reliance on third party service providers continues to grow (various IT including cloud services, but also white labeling of products), in many cases involving chains of service providers and subcontractors; it is a challenge to understand how a disruption of one provider could impact a single institution or even have potential for systemic risk. Second, as much effort we put into ex ante risk mitigation, it is only a probability question of WHEN something goes wrong, and thus a key to allow recovery, business continuity, and systemic oversight measures to work is rapid communication when disruptions occur. These are the common themes of regulatory focus from global standard setters (Financial Stability Board and Basel Committee), European regulators (forthcoming Digital Operational Resilience Act (DORA, part of the EU’s Digital Finance strategy), and the United States (Federal Banking Agencies incident reporting rule which went into effect May 1, multiple SEC proposed rule making, new legislation to harmonize cybersecurity incident reporting). I enjoyed drawing these parallels yesterday in a presentation for the Institute of Operational Risk’s 10th D-A-CH OpRisk Forum https://www.ior-institute.org/ior-events/10th-d-a-ch-oprisk-forum, as well as solutions to these challenges which CRINDATA is spearheading to meet ongoing challenges and future regulatory requirements.
#marketintegrity #CRINDATA #OpRisk
About Jim Freis:
Jim has devoted his career to promoting the integrity of the global financial markets. He is best known in the United States as the longest-serving Director (2007 to 2012) of the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN), overseeing regulations covering the broadest range of financial institutions in coordination with their primary licensing authorities, and for applying data-driven efforts to combat fraud exposed through the Global Financial Crisis. After FinCEN, Jim was based in Frankfurt, Germany with the Deutsche Börse Group, Europe’s largest provider of systemically significant financial market infrastructures, responsible for overseeing compliance and relations with global regulators including in the implementation of a holistic internal control system approach among Risk, Compliance, Information Security and Outsourcing oversight functions.
About CRINDATA:
CRINDATA, LLC (www.CRINDATA.com) offers unique cloud-based solutions to financial institutions who must actively manage their critical third-party relationships (including their indirect relationships with subcontractors) and must prepare for and mitigate business disruptions management and cybersecurity events originating anywhere in the chain of service providers and subcontractors. Concurrently, CRINDATA helps third party service providers like core systems, payments providers, transaction motoring solutions, banker’s banks, and corporate credit unions, by substantially simplifying the due diligence interactions with financial service companies and by providing a complaint, common platform to manage business disruptions and cybersecurity events when they occur.
Reach CRINDATA at info@crindata.com
202.990.6990
