Development of comprehensive frameworks for managing technology risk in banking operations

Posted: Sep 10, 2020

• Dr. Prof. Benjamin Chen
• Dr. Prof. Benjamin Mendes
• Dr. Prof. Daniel Park

Abstract

The rapid digital transformation of banking operations has introduced unprecedented technological risks that traditional risk management frameworks struggle to address comprehensively. Banking institutions face a complex landscape of cybersecurity threats, system integration challenges, regulatory compliance requirements, and operational vulnerabilities that evolve at an accelerating pace. Conventional approaches to technology risk management often operate in silos, addressing specific threats without considering the interconnected nature of modern banking ecosystems. This research addresses the critical gap in current risk management practices by developing a holistic framework that integrates computational intelligence with organizational behavior analysis. Traditional technology risk assessment methodologies in banking have primarily relied on statistical models and historical data analysis, which prove inadequate for anticipating novel threats and systemic vulnerabilities. The increasing sophistication of cyber attacks, coupled with the complexity of interconnected financial systems, demands a more adaptive and predictive approach. Our research introduces a paradigm shift by incorporating quantum-inspired computational methods and behavioral economics principles into technology risk management, creating a framework that accounts for both the technical and human dimensions of risk. This paper presents a novel framework that addresses three fundamental limitations of existing approaches: the inability to model emergent risks in complex systems, the neglect of organizational behavior as a risk factor, and the lack of adaptability to rapidly changing technological landscapes. By integrating insights from quantum computing, behavioral science, and cross-domain knowledge transfer, we develop a comprehensive methodology that provides banking institutions with enhanced predictive capabilities and more effective risk mitigation strategies.