Steve Percy
President, Diolkos Commerce Solutions
Nov 2021
The reason Banks continue to be successful is that they understand implicitly that we demand that our deposits are held safely, and that we are never cheated when borrowing or investing. No theft. No fraud. No problems. Ever. Trust is a cornerstone.
Ergo, Banker = Risk Management
Bankers are comfortable with risk because they take it seriously. Every internal group in the bank is trained on it including: Product Management, Branch and Service Operations, Treasury, Legal, Audit, Financial Control, Systems, Compliance, and other various Front and Mid-Office business lines. Externally, banks work with government regulators, law enforcement agencies, deposit insurers, tax authorities, central banks and NGO consumer advocacy groups. They all lean toward risk aversion. Every conversation begins and ends with one hundred questions.
We all know the old saying “Bankers only lend money to those that don’t need it.” Well, for those that deposit money to provide capital for banks to lend, this offhand joke is a good thing. And regulatory oversight of the banking industry supports the continued pursuit towards a perfect world of financial trust.
This is all good. We cannot afford a world that degrades towards mistrust in our financial matters. Safety and trust in exchanging payments and holding deposits are paramount to the stability of our society.
As consumers in the electronic payments world, we are experiencing the angst that our money is at risk of theft and fraud. We see stories on a regular basis of corporations being hacked for credit card numbers and our personal financial information. Authentication mechanisms beyond simple passwords are now common knowledge as we receive and re-enter security PIN’s to complete a login process. Are we being watch 24/7 ?
Services are now sold to protect our privacy that include insurance on financial losses that result from breaches. I have been notified twice that corporations have purchased privacy protection services on my behalf because of data losses due to hacking of their database. Unacceptable.
We have all begun efforts to protect our parents and the most senior members of our society against these fraudsters and live daily with concern over continued attempts to take advantage of them. Again, unacceptable.
Who do we trust ? Governments ? Individual Corporations ? Hmmmmm… these events of regularly reported hacking occurrences leave us wanting.
Well, I will put my money on Bankers and Banks ahead of everyone because their existence depends on it. And because I was an insider and know that the security and risk mentality is in their DNA. They will not move an inch unless they are confident that all Risks are assessed and controls are in place. They will spend more on all facets than any other industry or government. Guaranteed.
Banking EXCO place a high priority on their Risk Management practices. Risk is a multi-faceted profession. Products, Processes, People and Systems must adhere to constant scrutiny in order to manage and reduce risks of every type. Excellent. We as consumers and society are better off as a result.
But what about us, the consuming public ? What are our responsibilities ? At minimum, we need to pay attention and take all of this seriously as well. And our financial institutions should be helping us. Educating us. Giving us the information and tools we need in a proactive manner. And they should be investing in payment and deposit systems that will remove the risks of theft and fraud.
Note however that it cannot be complicated for the consuming public who “require ease of use” or we will never use it. The industry calls this “Frictionless”. Fortunately, we now have various technologies available to accomplish this. They just need to be configured in the right manner to deliver a complete solution. A solution for all payment types that moves us all forward. Not cherry picking a few.
The solution is reality. And it can meet the Bankers risk management scrutiny.
Diolkos Commerce Solutions
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