Commentary: Industry must embrace AI for cybersecurity | Operational risk remains key challenge for banks | Quality data sources help alleviate fragmentation challenge
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July 12, 2018
SIFMA SmartBrief Operations & Technology
News on the capital markets for operations and technology professionals
Top Story
Commentary: Industry must embrace AI for cybersecurity
The recent SIFMA Fintech Conference featured government officials, security experts and bank executives who advocated the use and potential of artificial intelligence for cybersecurity applications, and the industry should now embrace and facilitate its development, writes Charlie Mitchell. Initiatives such as SIFMA's proposal for the creation of a sandbox to encourage experimentation and unification of regulations regarding AI should be encouraged, he writes.
The Examiner (Washington, D.C.) (7/10) 
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How to stop fraud in its tracks with data and AI
Today's consumers are more tech-savvy and reliant on real-time applications than ever before. However, for every new security feature to protect data, perpetrators find a way around it. Read this white paper to learn how to beat fraud before it happens with AI and machine learning.
Operations Update
Operational risk remains key challenge for banks
Operational risk continues to be an area of concern for banks. "Losses from these operational risk episodes can be catastrophic, not just in a strictly monetary sense, but in terms of the impact on the bank's overall business and reputation, sometimes threatening its very existence," according to this brief from Bain & Co.
Bain & Company (7/10) 
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Quality data sources help alleviate fragmentation challenge
Capital markets firms can address the issue of data fragmentation through careful sourcing of data. Educating internal stakeholders remains a challenge, according to a Bloomberg study.
Bloomberg Professional Services (7/2) 
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JPMorgan's Dimon: Your people have answers, too
Leaders must respect staffers and must understand employees have ideas and want to make the business better, JPMorgan Chase CEO Jamie Dimon says.
Harvard Business Review (tiered subscription model) (July-August 2018) 
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Battling Fraud in the Financial Industry
To effectively battle fraud in the Right-Now Economy, financial organizations need nimble solutions that act at the data layer. Read this white paper to learn the specific attributes your database needs to provide powerful anti-fraud prevention and protection.
Technology Update
Banks use tech in augmentation of front office
Investment banks are using technology for front office functions to augment tasks of traders and other staffers, rather than replacing humans. Banks see this approach as a way to cut costs while serving a more diverse client base.
Risk (subscription required) (7/9) 
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Firms work to better understand AI risk models
Financial firms are struggling to explain how risk models using artificial intelligence and deep learning actually work to meet regulators' demands for greater transparency. An issue is reduction of the chance of error to improve the accuracy and interpretability of predictions.
Risk (subscription required) (7/11) 
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Open-source chat platform gains followers, spurs apps
Goldman Sachs' spinoff internal chat system Symphony has amassed 320,000 users since emerging in 2014. The open-source network is seeing banks add their own applications for a variety of functions.
Risk (subscription required) (7/10) 
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Regulatory and Legislative Update
Analysis: UK cyberdefense could shape global policies
The Bank of England and the UK Financial Conduct Authority have told financial firms they must implement systems that can recover quickly from cyberattacks and other challenges, such as computer failures and power outages. The procedure could shape policies adopted by international standards setters.
MLex (subscription required) (7/12),  Financial News (UK) (tiered subscription model) (7/5) 
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Data security a concern when banks, fintechs partner
More banks are partnering with financial-technology firms, sparking questions about data security. Regulators are pressuring banks to ensure information collected from consumers is secure.
Pymnts (7/5) 
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Complimentary Event: SOC Attestation Solutions, July 18 in NYC
SIFMA is organizing an event together with the AICPA to promote awareness of the recently released System and Organization Controls (SOC) Attestation Solutions for cybersecurity. These solutions, which SIFMA worked with the AICPA to develop, offer firms a new and efficient tool to handle vendor cyberrisk management. This event will help securities firms and the third-party suppliers they work with understand the SOC attestation process for cybersecurity, the value it can provide and how firms should prepare to use it and integrate it into their third-party risk-management programs. Presentations will include an introduction to the new SOC Attestation offerings, presentations by audit firms on how to prepare for and obtain a these attestations and industry views on its value for risk management.
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Introducing Primers, from SIFMA Insights
Why does the preeminence of America's capital markets matter? How can we ensure they remain the most deep, liquid and well-functioning in the world? In a new primer series, SIFMA Insights breaks down important technical and regulatory nuances to foster a fundamental understanding of the marketplace and set the scene to address complex issues arising in today's markets. Inaugural publications include an overview of the fundamentals of equity and fixed income market structure.
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