_{Introduction to Digital Transformation}

Digital transformation is the process of using digital technologies to change how financial institutions manage operations, serve customers, and process information. Using technology to streamline operations and gain efficiency is the core objective of digital technology. Digital transformation is key for every part of the financial services industry, and over the last decade there has been transformative changes in how organizations deploy tech, applications, digital tools and mobility solutions to reduce operational costs, improve customer satisfactions and drive innovation

_{Game-changers for digital transformation}

The rapid emergence of financial tehnology, companies, and rise in the number of digital first subscribers of financial products has seen a significant shift in how we call interact with money

FinTech reduces time, increase performance and delivers an enhanced experience for all users; cloud and mobile applications, the drivers of this transformation are now accessible across the world, changing the digital landscape as we read. At the same time, there has been an increase in irregularities of financial transactions in the form of fraud, identity theft, payment fraud, loan fraud, claims fraud and others. Accoring to Reserve Bank of India statistics, there has been a 300% increase in fraudlence over the last two financial years. There has been a rise in the number of cases in the insurance sector too in the last years with over 40% insurance firms facing instances of fraud or financial crime. These crimes impact the financial sector as a whole, including a bank's or an insurance companies honest customers and clients

The Forms of Digital Risk

Segmentation of risks based on their attributes and impact is key to understanding and combating financial fraud. Below are some the most reported instances of digital risk

1. Digital Payments - The ease of modern digital payments makes it easier for fraudsters to access and manipulate customer accounts. Companies handling large volumes of online payments are open to phishing and hacking

2. Identity Theft - Theft of a person's digital credentials and taking control of their accounts to conduct unauthorized transactions and fraudulent purchases are a result of companies not addressing their technological vulnerabilities

3. Data and Privacy - Access to data in all it forms means the risk of exposure as well. Data leaks whether intentional or otherwise, have a huge financial and reputational loss for financial services firms

How do we deal with digital risk

It's simple. Discover fraud faster. Deploy trained professionals to investigate and detects incidents of fraudulent transactions, collaborate with all stakeholders in creating awareness and a strong defense against fraud

The above illustration neatly lays down the vital steps of digital fraud detection and risk management - have the tech and processes to idenitfy fraud faster, deploy trained investigators to gain evidence, initiate regulations and legal actions and always be vigilant in monitoring your financial operation with a well defined risk management strategy

The importance of data & collaboration

Making complex decisions faster and with pinpoint accuracy is the mantra for digital risk management. The role of data and collaboration between all stakeholders is vital towards achieveing the above stated objective

Data management through effective structuring, analysis and visualization and data inteliigence is now achievable at a large scale through futuristic software applications that protect your data and customers while making data accessible based on profiles and roles. These sytems help organizations continuaslly monitor and study their data and move swiftly to address any concerns

These applications also provide a platform to all stakeholders to collaborate and apply their knowledge and expertise to make informed decisions that are critical in fighting digital financial fraud. The investigative process greatly benefits from this collaborative approach, increasing accuracy in verification and reporting. It also helps the legal and regulatory procedures to move at a faster pace

Conclusion

Integrity and swiftness in decision making when handling risk operationsare key to a company's reputation. Customers need to feel secure when dealing with a financial institution and this is what makes digital risk management a business advantage in a competitive market and companies need the right mix of people, processes and technology to achive it. Do visit our upcoming blogs to discover more on risk management for corporates