Changing Contours of Risk Management in a Digitized Financial Space: The Future Started Yesterday

Abstract

The first wave of digitization has automated the front-end of banking institution, now it’s the turn for digitizing back-end and use technology in risk management for gaining a competitive advantage. Machine learning and predictive analysis are being used for assessing various credit proposals. While digitizing provides added benefits, institutions must always be cautious regarding cyber and outsourcing risk involved. Regulatory and supervisory guidance will also play prominent role in this going forward.

Keywords: SupTech, Predictive algorithm, Regulatory sandbox, Risk Management using Digitization

JEL Classification: D81, D 83, G32, G41