Risks loom large as financial institutions explore new products, opportunities

DHAKA, Nov.  4  (NsNewsWire) — Banking and non-banking financial institutions in Asia and elsewhere have been facing new risks as they explore new products, partnerships and opportunities, experts said on Tuesday, reports Xinhua.
They stressed the need to adopt more risk mitigation measures to check any untoward incident in the financial sector.
The two-day “Asian Banking Summit,” organized by Nimain Management Consultants, a UAE-based financial services firm, is providing platforms for the national and international banking experts to discuss a wide variety of topics ranging from risk management to trade finance, compliance and IT security.
The stakeholders addressed the essentiality of globally adaptive risk management issues in the existing risk management systems to emulate the evolving paradigms.
“It is crucial to ensure that banks and financial institutions establish and follow appropriate risk management processes as they explore new products, partnerships and opportunities,” said Sur Chowdhury, Bangladesh Bank (BB) deputy governor.
To ensure that banks are prudently managing their risks, especially those can cause systematic threats and jeopardize stability of the entire financial systems, he said the central bank imposed prudential requirements to assess bank’s risks management capacity and has structured the banks to establish an independent Risk Management Unity.
The Risk Management Unity not only conducts stress test for examining bank’s capacity of handling future shocks but also deals with potential risks that might occur in the future, he said.
Rapidly evolving cyber threats and information technology requires heightened awareness and appropriate controls to identify and mitigate the associated risks, he said.
“The same is true for confidential breach and money laundering risks that remain prevalent across the industry as money laundering methods evolve and electronic bank fraud grows in sophistication and volume.”
As a consequence of the financial crisis and its contagion affects throughout the globe, banking regulations are getting increasing globalized, Chowdhury said. “The recent regulatory reforms is a response to the security of the crisis and the changes are intended to make the financial system more resilient.”
Meera Sanyal, former chief executive officer of Royal Bank of Scotland, India, said the summit’s focus on risk management is appropriate and timely given global macroeconomic instability and market volatility.
The summit offers a unique platform for “stakeholders in the Banking and Financial Services Industry to discuss, learn from each other and map out a plan that will fuel the success of national goals,” she said.
Echoing almost a similar views, Rumee Ali, chief executive at Bangladesh International Arbitration Centre said, “I’m sure this summit will add to the knowledge and data bank that can be used to drive the changes required for a more robust financial system, which all aim for to protect the present and build a better future.”  Enditem