Risk Managers Wear Multiple Hats as New Threats Rise – PYMNTS.com | Region & Cash

“Every day looks very different.”

Tom Frantz, risk manager at Airbase, told PYMNTS that in an uncertain macro environment where businesses are increasingly going online and cybercriminals are getting smarter, the risk manager has to wear a variety of different hats.

“You have to get your hands a little dirty — you have to be involved in all the operations,” Frantz said.

The ultimate goal is to effectively manage all types of risk – operational risk, fraud risk, regulatory risk, credit risk… and the list goes on.

Depending on the day and even time, the executive may need to alternate between being a full-time data analytics manager and working on product launches—perhaps even collaborating with end customers to solve various end-user problems.

All of this is of course the payment itself, which means that the risk manager needs to know about the payments made (cross-platform on behalf of the client) or unmatched transactions.

In other words, risk management isn’t just about fighting fraud, as Frantz described it. It’s also about dealing with just about anything that could adversely affect a business, from loss of money to loss of reputation… and risk management is also about protecting customers.

See also: Real-time insights into costs give companies a better view of their financial health

In order to address these threats head-on and do everything successfully, at least some quantifiable measures must be considered.

As Frantz described it, all companies must set the thresholds — the dollar amounts — that they are willing to lose, whether it be in terms of losses associated with loans and credit products or through fraud. Anything up to and including that dollar amount could be considered a “successful run” of risk management, he said.

There is also the benefit of collecting and analyzing data associated with previous risk and fraud events. At a high level, a risk event is a culmination of decisions impacting organizations and platforms over time. The output may be the loss itself, but the inputs are the decisions that ultimately lead to that loss, where knowledge gaps or strategy gaps may lie.

closing the gap

“Analysis helps you close that gap,” he said, and analysis helps create a set of early warnings/indicators to alert executives to external and internal threats.

As Frantz noted, it also makes sense to analyze the filings of public company securities regulators to determine where their own losses and risk mitigation strategies lie (which in turn may lead to some new approaches).

Going into detail, he said that truly preventative thinking involves proactively considering how and why a customer might not pay a bill or repay a loan — and how they might use a particular platform to meet their obligations.

Risk management professionals can strengthen their lines of defense for businesses by examining how bank accounts are linked, how prepaid debit cards are used, and how synthetic IDs can be created.

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It’s also important to monitor the channels within organizations through which sensitive information is sent and how that data could be exposed to and misused by fraudsters. With these real-time insights, organizations can more effectively decide how to spend time, money and technology in the ever-present battle against them.

A consortium approach can also be beneficial as competitors share data and intelligence on emerging threats keeping trading ecosystems as secure as possible.

Looking ahead, Frantz said: “You have to have an open mind and recognize that risk and loss is part of the business – but you can ensure that ‘big’ and more costly events don’t have to happen in the future. ”



Around: The results of the new study by PYMNTS, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy”, a collaboration with PayPal, analyzed the responses of 9,904 consumers in Australia, Germany, the UK and the US and showed a strong demand for a single multifunctional super app instead of using dozens of individual apps.

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