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What COVID-19 Risk Management And IT Risk Management For Financial Institutions Have In Common
If there’s one thing that we have learned from the recent COVID-19 crisis is that nothing is without risk. Any salesman that comes along and tells you that something is “risk-free” is not telling you the truth.
Whether you drive a car, ride your bike to work, or take the subway in a big city, there is risk involved.
Author: John McMahon
Read time: 6min
Life is Risk
What the financial markets have learned over the past decade is the fine art of managing risk.
Now, more than ever, our economy is dependent on you, our financial services and banking institutions, in conjunction with the Fed to manage the risk of inflation/hyper-inflation – avoiding the financial collapses seen in great civilizations before us like Athens, Rome, and the Weimar Republic in Germany.
But while you and your colleagues are working on helping our country walk this fiscal tightrope on a global stage, there’s one more thing you have to add to your collection of spinning plates.
You’re already all too aware of the problems of cybercrime stemming from lone-wolf hackers, cybercrime syndicates, and rogue nation-states. So, we won’t get into that.
The risk factors that you might not be considering right now are:
- Internal Espionage
- Crashes of Outdated Hardware
- Sluggish Legacy Applications that Drain Resources
- Mismanagement of Big Data
- IT Compliance Challenges
- The Incorporation of Unproven Technology and AI
The list could go on and on, but you get the idea.
Even if we ignore cybersecurity challenges (and you shouldn’t), there is still inherent risk in running financial services and banking IT systems.
What Do We Learn From COVID-19 About IT Risk Management for Financial Services and Banking?
1. Put the Professionals to Work – Whether you are a fan of the current administration’s handling of the COVID-19 crisis or not, you can certainly agree that we need to listen to the healthcare professionals. Why? Because most of us are not epidemiologists. The healthcare professionals can diagnose the problem, give us guidance to get things on track and provide ongoing support to keep the virus at bay. In reality, the CDC, WHO, and HHS are risk management teams. Dealing with risk in your IT environment really is no different, you need to get the professionals involved. Not somebody just out of “med school” but an experienced IT team that can give high-level guidance.
2. Containment and Mitigation – Here’s the hard truth. As long as you have an IT system in your firm or banking institution, there are going to be people trying to leverage that IT system against you for their gain. Technology professionals, like those on the IronOrbit team, have numerous ways to contain and mitigate threats (risks) to your proprietary data and confidential client info. One of those ways is called “sandboxing.” Simply put, an IT “sandbox” is a virtual IT environment in which we can run suspicious apps and open strange files and emails, so if one of them is dangerous, it never comes in contact with your cloud-based environment. Sandboxing is just one of the dozens of tools in the Iron-Orbit containment and mitigation arsenal.
3. Build New Systems – You already know that all systems were not created equal. This is a lesson that we have learned the hard way in the healthcare field during the COVID-19 crisis. In this challenging time, everything from medial logistics to food supply has had to be reconfigured or reinvented to meet the risk the virus is to our society. IT systems are no different. Many banking institutions and financial services firms (maybe yours) operate today on IT systems that are on the brink of failure. Their risk is high. To lower the risks we’ve mentioned above, IT systems have to be reimagined by technology professionals that deal with digital transformation technologies on a daily basis.
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