Former Trump administration economic adviser Gary Cohn anticipates more banking industry consolidation as smaller institutions struggle to keep up with technological innovations that are altering the financial services landscape.

Cohn, the former President and COO of Goldman Sachs, currently heads Starling’s Risk & Governance Advisory Board.
“You’re now starting to see more and more technological competition from an unregulated community,” he said, speaking about fintech companies. “That’s forcing the banks to become more technologically savvy themselves.”

Banks have to start changing the way they manage risk, Cohn argued. Referencing recent misconduct scandals that have featured in the headlines in just…

According to a recent Wall Street Journal survey of compliance professionals, organizations are facing new and amplified compliance risks, while the coronavirus pandemic has made many compliance programs far less effective.

Survey data shows that 90% of companies have experienced new risks or that existing risks have been exacerbated by the pandemic. Close to half of respondents reported both. One in four said compliance programs have taken a hit during the pandemic. As a result of these challenges, compliance and risk staff are forced to rethink their internal safeguards.

Investigations and risk assessments have become almost fully remote as a…

A recent Forbes article took a closer look at the challenges and risks organizations are currently facing. Maintaining business operations in an increasingly volatile and complex business environment is difficult. Doing this successfully requires proactive solutions encompassing people, data and infrastructure. Organizations need to move quickly to deal with risks as they evolve. That can’t be accomplished if risk management is sequestered in the back office.

Emerging technologies such as machine learning and artificial intelligence show great promise in helping risk managers pinpoint specific risks and develop responses. However, many risk teams haven’t taken full advantage of mature technologies in…

A recent Forbes article took a closer look at the challenges and risks organizations are currently facing. Maintaining business operations in an increasingly volatile and complex business environment is difficult. Doing this successfully requires proactive solutions encompassing people, data and infrastructure. Organizations need to move quickly to deal with risks as they evolve. That can’t be accomplished if risk management is sequestered in the back office.

Emerging technologies such as machine learning and artificial intelligence show great promise in helping risk managers pinpoint specific risks and develop responses. However, many risk teams haven’t taken full advantage of mature technologies in…

The shift toward data-driven corporate compliance programs has a new accelerant: the U.S. government. Companies are scrambling to figure out how to meet the latest expectations. In June, the U.S. Justice Department instructed its prosecutors to ask companies that come under investigation whether their compliance teams (1) have adequate access to relevant data, and (2) whether such data is being used to monitor for risks, and to test policies and procedures.

This push incentivizes compliance and risk staff to gain access to financial and operational data, and to adopt new technology solutions so as to better screen for risks before…

The shift toward data-driven corporate compliance programs has a new accelerant: the U.S. government. Companies are scrambling to figure out how to meet the latest expectations. In June, the U.S. Justice Department instructed its prosecutors to ask companies that come under investigation whether their compliance teams (1) have adequate access to relevant data, and (2) whether such data is being used to monitor for risks, and to test policies and procedures.

This push incentivizes compliance and risk staff to gain access to financial and operational data, and to adopt new technology solutions so as to better screen for risks before…

Australians are asking why it should take Royal Commissions, withering media reports, shareholder activism and litigation before boards and senior leaders recognise that issues of Governance, Culture, Remuneration, and Accountability (GCRA) represent material business risks.

Non-financial risk management in the financial services sector is managed according to a Three Lines of Defence (‘3LoD’) model. Following risk management failures, most post-mortems conclude that the 3LoD model was insufficiently well ‘embedded’ within a firm. Typical call-outs include: inadequate clarity in roles and responsibilities, coordination challenges, broken processes, and inaccurate risk reporting, collectively enfeebling the ‘voice of risk’ in the organisation. …

Starling’s Erich Hoefer, Mark Cooke, and Thomas Curry point to a critical problem with the industry-standard Three Lines of Defense (3LoD) risk management model. The 3LoD model and its proposed successor, the Three Lines Model, fail to account for social and behavioral drivers of misconduct risk and operational performance challenges.

The industry association of Operational Risk leaders in the financial sector, ORX, recently reported a sharp decline in non-financial risk related loss incidents at its member banks. While it is possible that banks have universally embraced higher business standards and risk controls, alternative explanations seem more likely. These range from…