With the rapidly rising significance of technology, ensuring adequate Cyber Security preparedness at the banks on an ongoing basis is extremely crucial. In this aspect, CISO’s role is very critical as he is responsible for establishing an adequate Cyber Security programme and coordinating with the compliance aspects to the bank’s policy across the organisation, says Biju K, Head, Operational Risk and Chief Information Security Officer (CISO), Federal Bank, in conversation with Elets News Network (ENN).
How vital is the role of Operational Risk Management (ORM) in banks?
Risk Management is a complex function at banks. Though thrust was on credit and market risk in earlier days, operational risk was subsequently identified as a separate class by Basel itself. As the name says, operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems and or from external events. Unlike other risks, operational risk is highly dynamic, very difficult to quantify and the impact can be extremely high. Several factors like the fast-changing banking landscape, huge adoption of technology, varying customer preferences, changes in regulatory regime etc. are having a huge impact on the operational risk.
How do you handle the Operational Risk?
The three lines of defence model is an effective way of handling operational risk. In addition to this, regular monitoring and risk assessments, timely identification of incidents and deployment of appropriate control measures are needed on an ongoing basis for effective risk management. Automating this process is very essential and helps to have a close track on the issues, progress achieved etc. on an ongoing basis.
How crucial is CISO for banks? What innovations have you implemented being a CISO of the Federal Bank?
With the rapid surge in usage of technology, ensuring adequate cybersecurity preparedness at banks on an ongoing basis is very crucial. CISO’s role is very critical in this aspect and is responsible for establishing an adequate cybersecurity programme and coordinating the compliance aspects to the bank’s policy across the organisation.
We focus on ensuring continuous monitoring of our assets to protect against any kind of attacks. Integrated Security Operations Center (SoC) is established in this regard, which focuses on timely detection and corrective actions.
What are your views on Phygital Banking? How is Federal Bank matching the alignment between physical and digital banking?
Phygital is an essential part of today’s banking. We are digital at the fore and human at the core and effectively fuse technology with the personal touch. We have a good in-house technology team and also teams up with digital partners to provide our customers a world class banking experience. Customers can avail an array of online services from account opening to availing loans. We use latest technologies like blockchain to implement quicker and safer transactions. End to end systems integration, use of Application Programming Interface (APIs), BOTs etc helps us to make the processes effective and reduce the cost.
How is the bank dealing with Non-Performing Assets (NPAs)? Have you done any major technology implementation in this regard?
Business intelligence and data analytics support the collection and recovery teams to identify early signs of delinquency. The team does the necessary follow-ups accordingly and minimises the possibility of moving to NPAs.