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Volume 30, Issue 2

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Monday, 17 July 2017 14:31

The Emergence of a Cognitive Risk Era: Intentional Control Design and Machine Learning

Creating Situational Awareness

Several prominent Wall Street firms are transitioning to a cognitive risk management environment. The changes they’ve made are significant, but there’s still work to be done. James Bone asserts that a more comprehensive approach is needed: one that includes intentional control design and machine learning – technology to help humans become more productive.

In my previous articles, I introduced human-centered risk management and the role cognitive risk governance should play in designing the risk and control environment outcomes you want to achieve.  One of the key outcomes was briefly described as situational awareness, which includes the tools and ability to recognize and address risks in real time.  In this article, I will delve deeper into how to redesign the organization using cognitive tools while re-imagining how risks will be managed in the future.  Before I explore “the how,” let’s take a look at what is happening right now.

This concept is not some futuristic state!  On the contrary, this is happening in real-time.  BNY Mellon, one of the oldest firms on Wall Street, has started a transformation to a cognitive risk governance environment.  Mellon is not the only Wall Street titan leading this charge.  JPMorgan, BlackRock and Goldman Sachs are hiring Silicon Valley talent among others to transform banking, in part, to remain competitive and to strategically reduce costs, innovate and build scale not possible with human resources.  The banks have taken a very targeted approach to solve specific areas of opportunity within the firm and are seeking new ways to introduce innovation to customer service and new product development and to create efficiencies that will have profound implications for risk, audit, compliance and IT now and in the foreseeable future.

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http://www.corporatecomplianceinsights.com/emergence-cognitive-risk-era-intentional-control-design-machine-learning/