How is digital transformation reshaping banks' exposure to risk and how can organisations leverage artificial intelligence and data analytics for proactive risk management? These questions were at the heart of a fireside chat at the 13th Banking, Payments and Fintech Forum and Expo, presented by Logicom, highlighting risk management as a strategic pillar of modern banking.
The keynote speaker at the 19 January discussion in Nicosia was Joseph Antoniou, Chief Risk Officer, Eurobank, who presented a comprehensive approach to the role of risk management in a rapidly digitising financial environment.
From control function to strategic pillar
As Antoniou underlined, over the last five to ten years, risk management at banks has undergone a profound transformation. From an isolated, reactive and mainly compliance-oriented function, it has evolved into an integrated, technologically supported and strategic role, embedded in the organisational structure, products and operational decisions.
The introduction of digital banking, artificial intelligence and automation, he noted, is accelerating this transition and making risk management an integral part of business strategy.
The benefits of digitalisation and the new spectrum of risks
Digitalisation, according to the expert, undoubtedly brings significant benefits for both customers and banks: simpler processes, increased transparency, greater access to products and more efficient business models. However, it also opens the door to a wider and more complex range of risks.
The shift from physical stores to APIs, algorithms and digital platforms increases exposure to cyberthreats, while digital fraud is evolving faster and becoming increasingly “synthetic.” As Antoniou underlined, banks must strengthen not only cybersecurity defenses, but also internal control and information management mechanisms.
The Silicon Valley Bank lesson
He made particular reference to the collapse of Silicon Valley Bank (SVB), describing it as one of the most characteristic examples of both the value and failure of risk management in the digital age. As he recalled, SVB grew rapidly, reaching assets of over $200 billion – a size approximately five times larger than the GDP of Cyprus – before collapsing in less than 48 hours.
The cause, he noted, was not the technology itself, but failures in basic risk management practices, such as interest rate and liquidity risk management. The digital nature of the bank and the speed of information dissemination through social networks simply accelerated the crisis, sharply increasing the speed of deposit outflows.
The new role of the risk manager
In this environment, Antoniou emphasised that the modern risk manager cannot function as an “auditor”, but must be a strategic advisor, with an active role in decision-making. Reputation management, customer trust and organisational resilience are becoming just as critical factors as traditional financial risks.
Digital transformation at the right pace
In closing, he underlined that traditional banks are called upon to implement their digital transformation on legacy systems and often with poor data quality, which differentiates them from fintechs. Despite the difficulties, the message was clear: digital transition is inevitable, but it must be done at the right pace, with the right defenses and with continuous investment in risk management.
As he characteristically stated, risk management in the digital age is not a one-day task, but a long-term journey that requires strategic vision, consistent investment and a strong "tone from the top".
The discussion was moderated by Soteroula Koutsofta, Senior Manager, Sales & Business Development at Logicom Solutions, contributing to a substantive dialogue on the future of risk management in the banking industry.
Main Sponsor: Logicom Solutions
Gold Sponsors: Ecommbx, Freedom Holding Corp., PwC Cyprus
Silver Sponsor: Moneygate, Parsectix, Sliq
Strategic Partner: Cyta Business
Sponsors: GZG, IMR/University of Nicosia™, Teroxx, payabl
Supporters: Alpha Bank, Bank of Cyprus, CDB Bank, Eurobank, National Bank of Greece (Cyprus), SGBCy
Exhibitors: EFFECT, Ellinas Finance, JCC Payment Systems, KLIDI, Profile Software
With the support of: ACB, ACEMPI, CFA Society Cyprus
Communication Sponsors: CBN (Cyprus Business News), GOLD magazine, IN Business magazine, Omega TV, Reporter, Super FM
Organiser: IMH
Website: www.imhbusiness.com
