Page 33 - Banking Finance April 2019

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monitor the progress of remedial measures. More than decision support systems that would present the
30 major banks are slated to be covered under detailed decision maker with clear and probable scenarios.
IT examination during 2016-17 and all banks by 2017- Particular attention need to be given to the input
18. RBI’s IT subsidiary (the Reserve Bank Information bias in such decision-making models, wherein the
Technology (ReBIT) Pvt Ltd has also become operational scope of subjectivity in the data sets required may
with a mandate to focus on issues around IT systems left the barrel open for sinking the ship.
and cyber security (including related research) of the • This process essentially gels into a cohesive risk
financial sector and to also assist in the audit and
structure and decision-making system. However,
assessment of the entities regulated by the Reserve we must also guard against too much objectivity
Bank.
and inflexibility. The best systems are those which
34. In November 2016, RBI advised all banks to carry out a despite being objective contains the scope of
special audit by the empaneled auditors of Indian flexibility within them.
Computer Emergency Response Team (CERT-In) on a • This dwells down to the issue of talent and skills
priority basis and take immediate steps thereafter to required to maintain this fine balance between
comply with the findings of the audit report and also to
objectivity and flexibility. What is required here is
take appropriate measures on mitigating phishing
being risk sensitive and developing risk sensitivity
attacks considering that the new customers are likely
among the employees.
to be first time users of the digital channels. Safety
and security best practices may be disseminated to • The propagation of risk sensitiveness in the
the customers periodically. Also, the Legal Entity employees paves the way towards development of
Identifier (LEI) is a 20-digit unique code to identify risk culture within an organization. This should be
parties to financial transactions is conceived as a key the ultimate objective of all the risk management
measure to improve the quality and accuracy of financial systems in place.
data systems for better risk management post the
Global Financial Crisis. The banks were encouraged to Conclusion
ensure that their large borrowers may obtain LEI for
36. Everyone will eventually move where the money is. No
their parent entity as well as all subsidiaries and institution will be able to compete without embracing
associates.
automation and digitization. The innovations will bring
35. Managing Risk in a Digital World – The Building to fore additional risks. Only regulations will not be able
Blocks, The Path and the Desired Outcome. to ensure that we realise true potential of digitization.
Crystal gazing at the future of managing risk shows Coordination among bankers and regulators though will
some basic building blocks that are needed. These blocks be able to achieve this. If together we get it right, it
will lead us to the ultimate objective of the risk will lead to higher growth in the digital age.
management systems in an organisation which is
development of risk culture. Digitisation will play a “I really think that if we change our own approach and
crucial role to this attainment. Let’s look at some of the thinking about what we have available to us, that is what
desired path. will unlock our ability to truly excel in security. It’s a
• Data management to be the fulcrum of the risk perspectives exercise. What would it look like if abundance
management in the digital world. The more were the reality and not resource constraint?”
organized, secured and correct the data is, the —Greg York, Vice President, Tribune Media, at
better risk management decision making may be SecureWorld Chicago
done on these.

• This essentially means eliminating the manual The views expressed are personal and not necessarily the
processes and also making the decision-making views of the Reserve Bank of India.
process subjective where essentially required. Assistance provided in the preparation of this paper by Shri
• The subjectivity of the decision-making process may Ashish Gupta, Manager, RMD, RBI is lovingly
be reduced further with better analytics and acknowledged. T

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