A.I. to Benefit Risk Management and Change Workweek to 3 days, is it possible?

Welcome back to the Risk Queue, this week A.I. is the buzz in the financial sector, promising magical benefits for firms embracing its potential. Also while Tech companies have long held claim to the coveted “Unicorn” title, there is one regulation that is assisting regulators in joining the exclusive herd.

Lets jump in,

Naeem Qasim

CEO & Founder, Risk On Q

Risk Headlines

JP Morgan’s CEO Dimon Predicts 3.5-Day Work Week, Thanks to AI 

Key Points:

• Dimon talks how AI will be utilized in developing new products, improving customer engagement, boosting productivity, and managing risks. The Bank has over 3,500 AI-related job openings and is pursuing over 300 AI use cases.

• Risk Management with AI is very exciting, managing the volume of risk has become a critical part of regulator expectations. Earlier this year the OCC acting Comptroller Michael Hsu, who has been a risk evangelist made statements to the Wall Street Journal that he expects the largest banks to show how they are on top of their risk or else face the consequences.

• The bank's CRO and risk management team are to be commended for their commitment to resolving risk issues and upholding the highest standards, which helps strengthen regulator trust as firms pursue critical strategic goals. After decades of experiencing and mitigating these issues for firms, we have developed our innovative software solution to transform risk management for financial firms. This technology delivers tremendous value through its ability to effectively address key challenges in this space. We welcome discussions with interested parties on how our solution can make meaningful impact for your organization and stakeholders.

You can read the full story at Bloomberg here. 

Rising Rates Likely Hit Bank Balance Sheets - Interest rate hikes have led to increased pressure on U.S. banks to maintain deposits, impacting their earnings. - Source Wall Street Journal

A. I. Risk / Technology Risk

Watch: AI Dialogue for Responsible Use & Regulation- from WSJ.com

NVIDIA System for HPC and Generative AI Set Records for Financial Risk Calculations - from NVIDIA

Fines, Losses, & Rules

SEC Charges 10 Firms With Widespread Recordkeeping Rules, Total $79 Million   -Source SEC.gov 🦄 

CFTC Fines Goldman $30 Million for Failing to Supervise Swap Dealer Activities - Source Yahoo Finance

Public Company Accounting Oversight Board (PCAOB) Adopts New Rules to Curb Fraud in Audits of Financial Information - Source WSJ.com

Bank Policy Instutite Insights “How Can the New Market Risk Captial Requirements Be Fixed?" - Source BPI.com 

While recognizing the importance of strong risk management, the disproportionate increase in capital requirements under FRTB does not align with the actual market risk exposure of institutions.

Career

Accounting Discipline, Why No One’s Going Into It! Source WSJ.com

Barclays Begins Laying Off Some Of Its Investment Bankers -source Reuters

Layoffs across the banking sector could emerge due in part to economic headwinds

Emerging Risk

OCC Releases Bank Supervision Operating Plan for 2024 - Source OCC.gov

Risk Data to Geek Out On

The U.S. Financial Regulators key Role, Regulations, & Fines Imposed - Source Risk On Q.com

Last week we discussed the U.S. Financial Regulatory rule-making process, image below. This week we are taking a look the US financial regulatory bodies and their key responsibilities, regulations, and some of the the larger fines they have imposed.

Your Input 

Thanks for reading.

Until next time!

Naeem

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