Third-Party Risk Management for Banks and Financial Institutions

Since returning from RMA GCOR, I've been flooded with conversations about Third-party risk management.   Customers, partners and prospects alike are going through an awakening regarding the risk posed by third-parties and it's interesting hearing all perspectives on the issue.  The guidance provided by the regulatory bodies such as the OCC 's Bulletin has been clear regarding what needs to get done, however, there seems to be a lot of confusion regarding the "how" of the requirements.  

Enter, "Third-Party Risk Management: Driving Enterprise Value" by Linda Tuck Chapman.  In this recently released book, Linda lays out how financial institutions should go about building a world-class third-party risk management program.  She does an excellent job of providing deep context on the problem, clear definitions of the risks associated and guidelines on implementation.

From her crystal clear definitions in chapter 1 to her tactics on monitoring in the last section of the book, Linda does a great job clarifying a difficult subject.  I'm going to gift this book to all of my banking friends.

The book should be available on Amazon in the coming days.  I'll update the post with a link to purchase.  In the meantime, I have few to spare so send me a message if you'd like a copy HERE.  

Trust Exchange Speaking at Risk Management Association's Governance, Compliance and Operational Risk Conference

Next week, I'm speaking in Boston on April 18th and 19th, at the Risk Management Association's  Governance, Compliance and Operational Risk Conference.  I'm speaking on a topic that is very familiar to me but may be a tad bit controversial for the typical Risk Management Professional.  The Topic: How Collaborative Compliance Overcomes the Limitations of Artificial Intelligence.

Artificial Intelligence has been over-hyped to the point where it is thought of as a cure-all.  In fact, some claim computerized superhuman intelligence is just around the corner. So powerful, that AI-powered computers and robots will take all of our jobs! This is simply not the case.  Ai has a LOT of limitations.  It is powerful but in a very specific set of applications.  

Artificial Intelligence works well when both the data being analyzed and the analysis rules are static.  OCR, Gaming, Diagnosis and Speech Recognition are all good examples of AI working at scale.  AI is a way to super scale LINEAR problems.  However, Operational Risk Management and Regulatory Compliance are fields wrought with redundant manual processes that chase and verify rapidly changing data.  They are EXPONENTIAL problems.

In my talk next week, “Compliance in an Exponential World: The Role of Artificial Intelligence and Curated Crowdsourcing in the Future of Compliance,” I will explore the use cases and limitations of Artificial Intelligence for managing risk and compliance and compare it to Trust Exchange’s unique Collaborative Compliance solution.

If you're attending, drop me a line here:  http://www.trustexchange.com/GCOR