Starling Co Founder Jeff Kupfer Featured on ABA Podcast on Risk Management

Starling Team

Jeffrey Kupfer, Starling Co Founder, was recognized as an emerging industry solution at the ABA’s annual Risk Management Conference in Orlando earlier this month. Ryan Rasske, SVP of Risk and Compliance for the ABA interviewed Jeff during the Conference proceedings. Jeff introduced Starling’s platform and discussed how banks are looking to leverage our solution to increase the performance and efficiency of their compliance and operational risk management functions.

Listen to the podcast: Solutions Spotlight: Starling

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Achieving Integrated GRC in an Interconnected Digital Age | Thomson Reuters

Starling Team

Thomson Reuters and Celent have published a report on how companies are approaching the challenge of managing effective GRC programs. The authors interviewed close to 30 Tier 1 financial institutions globally to better understand the challenges facing risk and compliance executives, as well as the technology improvements that are needed to support an integrated GRC paradigm to
overcome these issues.

The report finds that leaders responsible for the various lines of defense must think of their areas as technology-enabled business ecosystems. They operate more like a central nervous system — one that governs the health of an organization through responsive two-way feedback and risk mitigation mechanisms. At the same time, they must be able to be managed and operated in a decentralized way by various stakeholders and end-users. Fortunately, the same processes that make for strong GRC controls also make good business sense and will increasingly differentiate winners from losers.

The risk and compliance executives that were interviewed expect to see real benefits from digital technologies. The current state of the art is focused on moving away from incumbent platforms towards an open, integrated GRC hub.

Such a next-gen platform would support real-time, rules-based monitoring of data and models and would enable an integrated, dynamic approach to managing risk and controls across functional areas and lines of defense. Starling is currently working with banks to realize this vision whereby behaviors and relational dynamics can be monitored in real-time to provide feedback on the effectiveness of risk management processes and controls. Further enhancements are available as Starling is able to make the connection between risk team dynamics and critical outcomes measurable.

The Report is Available: Achieving Integrated GRC in an Interconnected Digital Age

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Preventing Toxic Culture through Investment in Social Capital | Harvard Business Review

Starling Team

Kevin Stiroh, Head of Supervision for the Federal Reserve Bank of New York, describes the powerful market forces that work to encourage toxic behaviors. Furthermore, these behaviors are often not contained within firms but impose negative costs on shareholders, industry, and society as a whole. These behaviors can be mitigated through investments in social capital. Stiroh goes on to argue for a public sector role in encouraging such investments in order to build stronger, more resilient bank cultures.

Read the blog post: The Economics of Why Companies Don’t Fix Their Toxic Cultures

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Financial Regulators Susceptible to Culture Risk Too

Starling Team

Following the Great Financial Crisis, many regulators around the world looked to embed their staff within the firms they monitored as a means to gain greater visibility into misconduct. It turns out that this may not have been as effective as first imagined.

While embedded employees do enjoy greater visibility, they are susceptible to the very cultures they are meant to supervise. Once they became part of that culture, they were less able to view the firm objectively and to distinguish between ‘normal’ and inappropriate behavior.

This is yet one more example of how traditional regulatory oversight suffers from significant blindspots unless a firm’s culture is taken into account. Starling predictive behavioral analytics equips firms to monitor culture risk directly to detect where high-risk behaviors may emerge, and where they may spread to next.

Read the article: Regulators Split Over How to Keep Banks Out of Trouble

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Banking Standards Board Releases 2017/2018 Annual Review

Starling Team

“For firms to be able to manage their culture, they must first understand it.”

So writes the head of the UK’s Financial Conduct Authority, remarking on a report released today by the Banking Standards Board. The BSB, which began its work in 2015, exists to help raise standards of behavior and competence across the UK banking sector, to the benefit of customers, clients, the economy and society as a whole. It is a private sector body funded by membership subscriptions and open to all banks and building societies operating in the UK.

This is the second year in which the BSB assessed behavioral and culture at its member firms. One key finding is that “a culture of fear and blame” leaves many employees unwilling to speak up when they witness illegal or unethical behavior. Equally important, though, was a perception that nothing would be done to address their concerns.

At Starling, we recognize that employees are much more likely to speak up and engage with those whom they trust internally. As such, understanding a firms internal “trust network” is an essential step in managing culture and conduct related risk.

Read the Full Review: 2017/2018 Annual Review

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