| | JULY 20208CIOReviewIN MY OPINIONEVOLVING ERM IN BANKING WITH RECENT TECHNOLOGY DEVELOPMENTBy Frank Tian, VP - Risk Management, Union BankThe past decade has witnessed great advancement of technologies, emerging tools and evolving business models in banking. How would these changes impact the Enterprise Risk Management (ERM) of banks in the coming years? Here are some thoughts on the evolving risk landscape. IT System Risk has greater consequences than everMore and more digital banks and fintechs have emerged who provide their products and services entirely via Internet and apps. The traditional financial institutions have also invested heavily in digital banking while reducing branch footprints, in order to adapt to the changing customer behaviors.With multiple IT systems and constant updates, it is paramount to ensure the continuous operation of these systems. Any failure could lead to inconvenient or even disastrous consequences. In Oct 2019, the challenger bank Chime experienced a payment processor issue, which took its website and app offline for almost 24 hours and denied its customers' access to funds. This is a scenario no bank wants to see. Thus, it is important to have recovery plans for all mission critical systems, some of which require well coordination with external service providers. Alternate communication plans need to be in place, for both customers and employees. For major IT projects, adequate resources need to be allocated and proper testing procedure to be followed ­ this is not a place to cut corners even as banks strive to be agile and achieve greater efficiency. Frank Tian
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