Welcome to our course on FinTech Risk Management We're going to talk today about different aspects of risk and managing risk in FinTech and I have together with me Theodore Clark as an instructor a co-instructor for this module Percy Dias >>Hi there Percy teaches courses at the university in technology management and risk management including IT auditing, including compliance and assurance for technology perspectives So, we're going to talk both about Tech and about Fin As we look at this, we're going to look at the overview of this from three different perspectives that of technology, that of finance and that of management I'm going to have, Percy and I together are going to talk about management of risk >>That's right >>Percy, primarily is going to take the lead on technology and I'll take the lead on finance when we think about that as risk We're going to talk about finance risk in terms of compliance and assurance and that's a whole area of banks and if you work in finance you know there's a big area of compliance and assurance But compliance and assurance to an IT person means something entirely different than it does to a banker >>Yes, that's right. We're going to focus more on the IT compliance and IT regulations and then to make sure that the system is good enough and it's not going to be crash if any case that something happened and even if a system is down that we can up and run the system as soon as possible As well as, the risk is minimized in terms of IT So, this is part of main focus >>This is true of any technological company not just a finance company >>That's right >>But we're used to finance thinking of compliance insurance means regulations >>Yes >>In IT, it doesn't mean regulations it means something else >>That's right. IT, when you look at in general IT compliance and assurance so we begin with risk assessment of IT systems and then we come up with controls to reduce the risk of IT systems that's very important here >>That matters, but we also have to look at corporate governance and management of organizations and many financial institutions Now, when they think about risk management some governments require that a risk management committee be appointed >>Thats right >>That a risk management officer be appointed So, more and more we're seeing companies in FinTech starting to say this is not just about compliance with regulation it's not just about compliance with IT specs or requirements >>That's right >>There's a whole area of risk management that goes beyond these into the world of corporate governance and management in general >>Especially, now when we move from actually finance go to using technology that's what we do in FinTech or even sometimes we call TechFin So, we use both FinTech and TechFin So, no matter, whatever it is we're bringing technology into our financial products our normal financial processing as well When we do that, we can't forget the IT aspect of that and we should make sure that our IT is good enough Sometimes we might think about cyber security I'm not sure whether we have time to touch on that but, of course at the same time like when we change from one system than system we might think about change management issues as well >>We won't cover this in the intro video but we will cover it during the course as we get into more detail In week one, we're going to look at this from a perspective of banking Finance compliance and assurance and I'll take the lead on that Week two Percy and I will work together and we'll look at corporate governance corporate guidelines, risk management in general and how do you think about risk In weeks three and four Percy will take the lead to talk about technology >>Yes. One area that I might be thinking about is business continuity and disaster recovery as well Because when we rely on systems systems can be down So, if a system is down any case then there more so those financial products and financial systems Even as you know that like something like stock exchange if the system is down there is no way that we can do it manually >>If you look at it from a finance or a banking perspective they will call this operational risk or operational requirements From a technological point of view we think of it as compliance and assurance but it's a different kind of compliance and assurance than what banks call compliance and assurance which we'll deal with in week one Different perspectives on risk That's our focus here Is how do you manage and deal with risk and any kind of company involving technology and finance together? >>We're going to look at both aspects to a certain extent It's not really as you mentioned Ted it's not really we looking at the compliance and regulation from the authorities at same time we should make sure that our systems are up and running and we take the necessary steps to reduce the risk >>Now, that we've had an introduction to where we're going in this course let me break for a minute and come back and talk to you about week one and where we're going in the first week Just a brief introduction to what's going to happen in week one of this four-week course This first week, we're going to talk about the history of regulation Where's it been, financial regulation, where we come from To some extent, where are going Then we're going to look at some of the challenges complications of financial compliance which is a big area of compliance It's not the only area of compliance but it's a big area of compliance is financial compliance and why is this hard Then we're going to talk about some of the risks and opportunities of avoiding or bypassing regulations To some extent, a number of people have said FinTech is all about avoiding regulations or bypassing regulations or doing something differently That's an important part of understanding what's happening in FinTech markets, what's driving things So, it's not all of FinTech it's certainly not everything but it does matter So, we'll talk about some of the issues the opportunities as well as risks avoiding regulations We'll then look at a particular area of FinTech and finance and that is compliance with security laws and cryptocurrencies and ICOs and how those combine to create interesting opportunities and challenges Why it's not always working but sometimes this is a particular area where we may be able to avoid or evade some kinds of compliance Securities, monitoring compliance also is an area we'll focus on So, in our next session next to last session in this first week we'll talk about monitoring compliance security compliance, data protection and some of the issues with that These are not normally what you think of as financial compliance but they are the same regulators They're the same laws and they apply to finance firms as well as FinTech firms In some cases, even more to FinTech firms because we're now talking about data in a major way and some of these laws are targeted heavily towards tech firms and not just finance firms Finally, we'll look at risk and control and tax Why do governments do this and what are they trying to do with laws to tax or control information to control the economy and how does that relate to FinTech This is an overview of where we're going in this first week of this course We've already talked about where we're going in later weeks We look forward to having you in this four week course plus the final project related to FinTech risk-management. Thank you
