What we are seeing here across the board is far more than a trend

AI can be deafening at times, this often obscures the fact that enterprises are seeing real benefits from using these technologies.


The range of technologies that comprise artificial intelligence (AI), including natural language processing-driven bots, machine learning (ML) and deep learning, along with robotic process automation (RPA), are changing the ways in which business is done across a number of industries, from insurance, to legal and financial services, through to retail, travel, hospitality and transportation.

The impact of AI on these particular industries is hard to overstate. What we are seeing here across the board is far more than a trend. These technologies are revolutionising and re-inventing these industries in ways that go far beyond just automation – they are speeding up and reshaping existing business processes, while enabling new ones that were not possible earlier. Similarly, as some job roles disappear, many others will be created to help train, explain and sustain these algorithm-driven business processes.

Rarely a day goes by without a new story hitting the headlines relating to the impact that AI is having on specific industries or particular businesses. The range of opinions, from hype and excitement about the technology’s possibilities, to fear and apprehension about its negative impact on society, is evidence that AI is fast becoming one of the most misunderstood technologies of our time.

AI boosts efficiency in the legal profession

A recent story suggested that British legal firms can improve their efficiency by 50% by using the latest AI technologies available on the market. This bold proposition was made by a virtual data room provider called Drooms, who say that the legal sector has been considerably slower than many others in terms of adopting new methods of automating business processes, due to its conservative nature and inherent scepticism. While the hype around AI can be deafening at times, this often obscures the fact that enterprises are seeing real benefits from using these technologies, which are maturing rapidly.

As the area of Language Comprehension and Idea Learning progresses, driven by advances in deep learning, we see increasing potential for using AI in the legal industry. AI can help identify risks in contracts; flag up compliance issues across complex contracts; enable much quicker, more intelligent search of documents based on concepts rather than keywords or strings and even estimate the probability of legal actions succeeding or failing. A lot of these technologies are already out there – legal firms who experiment and adopt these ahead of the curve will see benefits in productivity and speed that outstrip their peer group.

Where threats to hourly billing models are concerned, firms that use these tools to improve the quality of advice and service to their clients are more likely to see the benefits in greater client loyalty. Furthermore, they will be in the best position to take advantage of the new kinds of jobs that the advent of AI will throw up, where clients will need expert advice to help them understand issues like agency, accountability, fairness and decision making in an algorithm-driven world.”


From business efficiencies to more exciting, personalised retail and travel experiences
The rapid growth and business adoption of AI is transforming lives and businesses globally, by helping companies to automate previously routine and monotonous tasks and by offering consumers a choice of much-improved, personalised experiences and services across the world.

When it comes to industries such as retail and travel, for example, it’s vital that businesses adopt the latest technologies to recognise and respond to the needs, wants and desires of their consumers. That’s why retailers and travel companies have been ahead of the curve over the last decade when it came to web and mobile e-commerce innovation. Amazon, AirBnB and Uber have completely changed the nature, perception of and consumer expectations around retail, hospitality and transportation.

While these companies have been using AI at the heart of their business for a while now,
other retailers and travel companies are discovering how to harness it to predict consumer preferences, to personalise services and stores, to complete bookings and sales and to address even unstated customer service needs.

In travel, for example, there are a number of opportunities for AI to help improve the customer experience. Firstly, biometrics and facial recognition technologies can remove the time-consuming need for documents to be checked at regular steps of a journey. Secondly, machine learning models can help predict consumer preferences at a granular level, enabling enterprises to construct a ‘360-degree view’ of the consumer in real-time, which then enables them to create hyper-personalised product and service offerings. The impact on conversion rates and customer loyalty can be transformational for the enterprise that implements these. Next, conversational apps and voice-driven virtual assistants are offering time-poor travellers a more personalised way to interact with organisations, to make bookings or to get specific information to meet a need in a particular time and place.

There are many more opportunities – automated social media analysing tools can provide travel companies with real-time insight into how their customers are feeling in a given situation and help companies to offer instant solutions to any problems their customers might be facing due to traffic problems, flight cancellations or one of the many other variables that can cause travel issues. And of course, predictive machine learning algorithms are transforming demand planning, operations, marketing and back-office operations across the entire enterprise.


At E2Labs, a cyber security warrior force is being readied

Organisations need higher preparation levels and better systems to anticipate, detect, fix and prevent cyber attacks.

With rapid technological evolution, there are several concerns, constraints and challenges around cyber security. The biggest challenge is ‘tech-knowledge lag’, says Zaki Qureshey, chairman and founder, E2Labs and HomeLand Security Solutions, and an independent computer security and digital intelligence consultant specialising in curbing cyber crimes and cyber terrorism. He has been credited for starting the first school of ethical hacking in Asia.

Security measures and technological advancements are not keeping pace with the speed and sophistication of cyber criminals, says Qureshey. Organisations need higher preparation levels and better systems to anticipate, detect, fix and prevent cyber attacks.
“Major threats like malware and spear phishing are being employed by cyber thugs to cyberjack computer networks, steal confidential data and gain illegal access to systems.


While existing technologies such as endpoint detection response or EDR can help locate and smoke out these dodgy malware, also known as RATs (remote access Trojan), mechanisms such as email gateways are being employed to tackle spear phishing and halt malicious e-mails in their tracks before they reach the inbox to inflict damage,” he says, adding that the key to staying ahead is to invest in research and develop water-tight security systems.

The second challenge is team-work lag. Extensive cooperation between key stakeholders is critical to winning the battle, he says. “Given the frequency and destructive power of cyber attacks, cyber security must be mandatorily pre-budgeted, in fact as top priority to ensure secure information and minimum collateral damage.”

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Cyber security startups fall on harder times

Their early investors have been left without an easy or profitable exit.

SAN FRANCISCO (Reuters) – A wave of cyber attacks by criminals, spies and hacker activists should make these heady days for U.S. cyber security startups.

Instead, many in the crowded market are struggling to live up to their early promise. In some cases, the security products they developed have been overtaken by advances in cyber hacking, according to industry executives and venture capitalists. In others, larger competitors have come out with similar technology and locked down customers.

“I have never seen such a fast-growing market with so many companies on the losing side,” said David Cowan, a partner at Bessemer Venture Partners, a venture capital firm that has invested in the cyber security sector.


Venture capital continues to pour into the industry, driven by the belief that there is no end in sight to cyber attacks or companies’ need to protect themselves. Yet only a handful of startups have successfully sold themselves or floated in the stock market in recent years. (Graphic: tmsnrt.rs/2mzClbR)

The result is a number of these start-ups have become corporate “zombies” with little prospect of fetching a good price in an initial public offering (IPO) or becoming acquisition targets, experts said. Their early investors have been left without an easy or profitable exit.

Not only is the technology behind cyber attacks rapidly evolving, the nature of how the corporate world uses security firms is changing. To save money and trouble, some companies have consolidated their security work, using just a few large players rather than spreading business around.

Companies are also diverting money to lower-cost “bug bounty” firms that contract out researchers who help identify security weaknesses.

“Suddenly, we are in this situation where there are just too many vendors and too few can be sustained,” said Dave DeWalt, the former CEO of cyber security company FireEye Inc (FEYE.O).

“You’re starting to see companies go, ‘oh my gosh, what do I do? Can I get more capital, do I have to merge?’” DeWalt said.

Momentum Cyber, an advisory firm focused on cyber industry mergers and acquisitions, said it tracks 2,500 security companies today, almost double the number a few years ago. The firm’s co-founder, Eric McAlpine, estimates 300 cyber security startups launch every year.

Few of these are pulling off IPOs. What’s more, big software companies have become less willing to acquire cyber security products they believe they can develop on their own.

“The pipe dream days of selling companies at a rich price equivalent to ten times their revenue are gone,” said Tom Kellermann, chief executive of venture capital firm Strategic Cyber Ventures.

ForeScout Technologies Inc (FSCT.O), a provider of software that helps companies keep the devices of their employees secure, was the only U.S. cyber security company, excluding identity management providers, to go public last year. This compares to three cyber security IPOs in 2016 and four in 2015.

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Ways of applying operational risk management in banks

Because of this, operational risk management in banks is the highest priority for banks.

The banking sector should rank foremost among the many sectors of the economy that have undergone drastic changes in the last couple of decades or so. The convergence of two colossal factors – globalization and the development of technology – has made inroads into the banking sector, impacting it with a force that was seldom seen earlier.

The number one area of the banking sector to be affected by these changes is operations. Many factors such as credit, software, etc. need to be regulated for their risks. However, the core of the banking sector is operations. Because of this, operational risk management in banks is the highest priority for banks.

The Basel Accords



The primacy of operational risk management in banks can be understood from the fact that one of the most important regulations aimed at the banking sector, the Basel Accords, a series of plans to regulate the banking sectors around the world; has operational risk management in banks on top of its agenda. Operational risk management in banks is one of the four areas identified at the second of these conferences, Basel II, the others being regulations concerning capital allocation, disclosure requirements and regulatory arbitrage.


Operational risk management in banks according to Basel

The Basel Accord takes a very comprehensive view of operational risk. It describes operational risk as loss that can occur from a variety of reasons, all of which are linked to the core banking structure. The Basel Accord sees risk as something that can happen from any of the operations concerning the bank. It requires operational risk management in banks to take all of these factors into consideration before arriving at solutions to prevent loss from these operations.


From the Basel Accords perspective, operational risk management in banks need to take into consideration the following events and identify all of these in identifying frauds and losses:

Internal fraud

Any fraud from any of the bank’s employees, insider trading, false reporting of profits are among the kinds of activities listed by Basel as being part of internal fraud.

External fraud

External fraud can happen from a number of sources. It could be robbery, burglary, hacking of security systems or check bounce. These are part of operational risk management in banks.

Employee fraud

Employees can be a major source of bank fraud. Steps towards mitigating actions from employees that endanger the functioning of the bank constitute a major step in operational risk management in banks.

Other kinds of frauds

Operational risk management in banks has to also take other sources of fraud. These can be from wrong entry of accounts, improper documentation for credit or loans, etc.

Ways of applying operational risk management in banks

Basel II has suggested methods which banks can take to apply risk management in their sector. These include:


Finance chiefs say bitcoin is ‘real’ but many think it’s in a bubble right now

A third of respondents in EMEA also think bitcoin is a “fraud,” higher than their counterparts in the other regions across the world.

Bitcoin is a “real” asset but it’s currently in a bubble, according to a CNBC survey of global finance bosses, with many calling it a “fraud.”

Ninety-seven chief financial officers (CFOs) on CNBC’s Global CFO Council were asked their view on bitcoin. Out of the 43 that responded, 27.9 percent said the cryptocurrency is “real but in a bubble.” Another 14 percent said that bitcoin is “real and still going higher.”

Meanwhile, 27.9 percent said bitcoin is a “fraud” while 30.2 percent of CFOs said they don’t know enough about the digital currency to have an opinion.

Of the finance chiefs based in Europe, the Middle East, and Africa, 41.7 percent said that bitcoin is “real but in a bubble” compared to 20.8 percent in the U.S. and 28.6 percent in the Asia Pacific region. A third of respondents in EMEA also think bitcoin is a “fraud,” higher than their counterparts in the other regions across the world.

Karim Hajjar, chief financial officer of Solvay, and a member of CNBC’s Global CFO Council said, that the “jury is out on bitcoin.”

“It’s not a currency we are using for a multibillion dollar business … it’s something we are curious about, we are very very open to, but we haven’t found a way to really integrate it into our business,” Hajjar told CNBC in a TV interview on Tuesday.

“If a hypothetical customer comes to us and says, ‘I have a bunch of bitcoins to buy your products,’ first thing I’ll probably want to do is not turn them away but probably find a way to sell those bitcoins before I commit to the order and then really make sure we meet the needs of that customer.”

Bitcoin hit an all-time high on Sunday, breaking above the $8,000 mark for the first time ever. The price of the cryptocurrency is up over 700 percent this year.

The rapid rise of bitcoin has sparked fierce debate over the the future of the digital currency. JPMorgan Chase CEO Jamie Dimon famously called bitcoin a “fraud” and said anyone who buys it is stupid. UBS meanwhile called bitcoin a “speculative bubble.” And regulators have also been keeping an eye on bitcoin with some clamping down on trading. China recently banned cryptocurrency exchanges.

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Companies continue to increase transparency of external audit oversight

For the fourth year in a row, audit committees have continued to enhance transparency around their oversight of the external auditor by voluntarily and broadly increasing disclosure

More companies are providing investors and other stakeholders with information about audit committee oversight of external auditors, according to the latest edition of the Audit Committee Transparency Barometer, an annual report released Wednesday by the Center for Audit Quality (CAQ) and Audit Analytics.

“For the fourth year in a row, audit committees have continued to enhance transparency around their oversight of the external auditor by voluntarily and broadly increasing disclosure,” Cindy Fornelli, executive director of the CAQ, said in a press release. The CAQ is affiliated with the AICPA.

The barometer found that 37% of S&P 500 companies’ proxy statements included enhanced discussions of the factors audit committees considered in recommending the appointment of the external audit firm. That’s up from 31% in 2016 and 13% in 2014.

The analysis, which also looks at mid-cap and small-call companies in the S&P Composite 1500, found that 24% of S&P MidCap 400 companies and 17% of S&P SmallCap 600 companies provided enhanced discussion of audit committee considerations in choosing an audit firm. Those percentages are up from 10% and 8%, respectively, in 2014.

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How to test your firm’s Compliance Program based on what the Regulators are Focusing on

What thinking the regulators bring into a financial year, which will have a major bearing on the financial industry.

The financial regulators publish a listing of their exam initiatives for the upcoming year. Financial advisers use this listing to anticipate what thinking the regulators bring into a financial year, which will have a major bearing on the financial industry. This listing offers financial advisers an idea of what to expect during a particular financial year.

For instance, taking off from the backdrop of the financial crisis of 2007 to 2009; the financial regulatory priorities listed out in a study carried out by Harvard included the following:

o  Increased capital regulation

o  Improved stress testing and capital planning

o  Regulation of the liquidity requirements

o  The need for learning the tools for regulatory migration across financial institutions

o  The authority the regulatory agencies have in regulating large financial institutions

These constitute the broad items of financial regulatory priorities. Financial advisers may use these financial regulatory priorities issued at a particular point of time to make assessments and calculations that help them arrive at decisions which they pass on to investors. However, different priorities emerge from time to time, simply because the financial situation is fluid and ever evolving.

Based on evolving priorities and situations

Financial advisers may make valuations and offer honest advice to investors about the financial markets, but these can be subject to flux. In the event of these changing goals and situations; it is not possible to arrive at black and white conclusions about the priorities.

Financial professionals and those who take their advice need to be fully alert to the happenings in the financial landscape if they have to arrive at the right decisions. How do they do that? What is the basis on which the exam initiatives need to be understood in order to facilitate sensible decision-making about finance?

Learning about how to understand exam initiatives

This is what a webinar from Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance, will be offering at a webinar. This webinar will have Lisa Marsden, IACCP, who is the President and Founder of Coulter Strategic Services. Coulter Strategic Services, which provides Financial Advisors and compliance consulting firms with compliance and project management services, as the speaker.

Please visit day to day tasks of financial compliance to enroll for this webinar and gain clarity in understanding the details set out in the regulatory exam initiatives.

Understanding how the priorities suit participants’ organizations

The speaker will explain what each financial industry participant needs to know about this year’s regulatory initiatives. She will highlight the importance of learning from priorities that are involved in the day to day tasks of financial compliance.

She will show how participants can learn the ways of reviewing the regulator’s annual priorities list and incorporating the priorities that relate to their own firm into their compliance program. The ways by which to test the specific areas and how to remediate any issues found, will be explained. Beyond the priorities, Lisa will also show how to find out what to expect from exams and how to test the suitability of the participants’ compliance program based on what the regulators are focusing on.

Lisa will cover the following areas at this webinar:

o  Learn how to gain access to the financial regulators priorities

o  Understand how to apply those priorities to your firm

o  Incorporate the priorities into your annual review

o  Distinguish which priorities need to become part of the Compliance Manual/Code of Ethics

o  Determine what your firm’s financial regulatory priorities should be

o  Other sources for annual priorities.

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