Time is of the essence. In an ever-evolving industry, banks must pivot more effective approaches to cybersecurity solutions and model risk management. The sooner banks start their journey, the faster they can establish controls and manage risk.
Cyber attacks are becoming more frequent and increasingly sophisticated. In response, financial institutions must use more analytical tools and solutions to analyze and mitigate cyber threats. As cyber models grow, the risks related to the design and use of those models grows too. In banking, cyber solutions are utilized by following three primary objectives: safeguarding mobile and web applications, identify risk exposure, and review existing cyber defenses.
A path an organization could take toward establishing effective governance and standards includes conducting awareness workshops, building capabilities, reviewing model landscape and identify inventory, customizing MRM standards, conducting independent validation, measuring model risk, and reporting it internally.
The time is now to employ cybersecurity MRM to ensure everyone is current in preventing threat actors from causing a costly attack.
This article was originally published on McKinsey.com on August 22, 2022 and is reprinted here by permission.