Starling advisors Gary Cohn, Mark Cooke, and CEO Stephen Scott feature in Fortune

Starling Team

Over the last decade, the financial industry was subject to increased regulatory scrutiny and public scorn triggered by misconduct scandals. During the coronavirus shutdown, however, banks have been critical partners to policymakers struggling to prevent a full-blown depression. Amidst such efforts, regulatory supervision has been partly suspended, to allow the industry to focus on the provision of economic relief.

However, lighter supervision might result in a heightened conduct risk. It is highly likely that increases in opportunistic crime will be spurred by economic anxiety. With many working remotely, outside the scope of standard internal risk controls and systems, things could turn sour quickly. Banks must therefore exercise added vigilance if they are to avoid future scandal and regulator wrath.

A rules-based approach to risk and compliance governance has failed to prevent misconduct in the past, and such an approach is to be avoided now. Firms have not done well in anticipating misbehavior, in part because their leaders overweighted the impact of setting the right “tone at the top,” when it is actually the “echo from the bottom” that matters more. Now, what is called for are principles-based policies aimed at encouraging responsible corporate cultures.

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Institutional Innovation Report | Aspen Digital

Starling Team
Aspen Digital recently released a new report, Redefining the Workscape Bringing Value and Values to Machine-Human Collaboration.  The report summarizes a two-day Roundtable discussion in which Starling founder & CEO Stephen Scott participated last summer. It features discussions on the future of work, with a focus on business structures and leadership strategies that can help organizations leverage the opportunities presented by new technologies.

As Stephen emphasized during the Aspen Roundtable discussion, “networks of trust” within an organization work to cultivate a sense of belonging and community, to foster camaraderie and collaboration, and to engage people in a shared sense of purpose and a common corporate culture.  Such trust networks are an over-looked and critical company asset.

Rather than the current reliance upon complex technology-based risk management systems that operate at multiple “layers of defense” across broad geographies and distributed teams, Starling emphasizes that behavioral science, organizational network analytics and machine learning combine to allow managers to map and measure the “social capital” at work in their firms, and to harness that to serve improved performance and risk management goals.

To learn more about these and other ideas explored by the distinguished Aspen Digital Roundtable participants, download the full report here.
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Available Now: Starling’s 2020 Compendium!

Starling Team

Starling’s 2020 Compendium is available now! This annual report on regulatory activities and priorities regarding Culture and Conduct Supervision in the Banking Sector has become an industry “must-read” and a platform through which the industry addresses itself on this important topic.

The report is packed with contributions from among our global audience of central bankers, bank regulators and supervisors, international standard-setters and prominent industry figures worldwide, as well as commentary from our prestigious advisory team. Get your copy now!

Download the 2020 Compendium here

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Mark Cooke, former Global Head of Operational Risk at HSBC and Chairman of the Operational Risk Exchange (O.R.X.) Joins Starling’s Risk & Governance Advisory Board

Starling Team

Starling, an applied behavioral sciences technology company, has announced the appointment of Mark Cooke to its Risk & Governance Advisory Board.

Mark Cooke joined HSBC in 2014 as Group Head of Operational Risk. In that role, Mark led a team of risk officers across the firm’s global footprint, overseeing non-financial risks such as compliance breaches and staff misconduct, before taking a sabbatical in 2020. Earlier, Mark held senior leadership roles at Barclays and UBS in risk, finance and operations. Today he is Chairman of ORX, the financial services industry association for Operational Risk Management.

Cooke joins other distinguished members on Starling’s Risk & Governance Advisory Board. The company recently announced the appointment of Gary Cohn, former Director of the U.S. National Economic Council and past-President & COO of Goldman Sachs, and Siew Kai Choy, former MD at GIC, Singapore’s sovereign wealth fund, where he was Director of the Enterprise Data & Analytics Department and founder of GIC Innovation Labs.

“Starling’s innovative proposition is that, by using non-traditional risk data, machine-learning techniques and social science, we can develop real-time insights that enable proactive risk management,” Cooke said. “By identifying leading-indicators of risk we have the potential to unlock tremendous value, in terms of better risk management outcomes, but also through a step-change in productivity that firms may derive through automated risk analytics,” he added. “I’m delighted to join the extraordinary team that Starling has assembled and look forward to helping the company develop these important new tools, addressing the lack of proactive capabilities we see today for the benefit of the financial services industry.”

“Mark is an incredibly accomplished operational risk management leader, having served most recently with one of the most complex and systemically important global banks,” said Starling Founder and CEO, Stephen Scott. “His role as chairman of O.R.X., the association of OpRisk leaders at the top-100 financial firms in the world, affords Mark a unique view over the entire landscape of nonfinancial risk struggles that confront the industry,” Scott added. “We – and our customers – are deeply fortunate to benefit by Mark’s perspective.”

About Starling

A globally recognized RegTech pioneer, Starling is an applied behavioral sciences company that helps customers to create, preserve, and restore value. Combining machine learning and network science, Starling’s Predictive Behavioral Analytics platform allows managers to anticipate, and to shape, the behavior of employees and teams.

Starling reveals how relational trust dynamics within an organization impact business performance — predictably. Its proprietary algorithms generate actionable insights that allow leaders to optimize performance and to identify and mitigate culture and conduct risks before they cascade into crises.

With Mark Cooke, other members of Starling’s newly formed Risk & Governance Advisory Board include Gary Cohn, former Director of the US National Economic Council and past-President & COO of Goldman Sachs, and past Director of the Enterprise Data & Analytics Department at Singapore’s sovereign wealth fund (GIC), Siew Kai Choy, who also founded the GIC Innovation Lab.

Senior Regulatory Advisors include Tom Curry, former US Comptroller of the Currency and member of the Board of Directors of the Federal Deposit Insurance Corporation (FDIC); Rick Ketchum, former CEO of the Financial Industry Regulatory Authority (FINRA), past head of regulation for the NYSE, and former President of both the NASD and NASDAQ; and Martin Wheatley, inaugural CEO of the UK Financial Conduct Authority and past CEO of the Hong Kong Securities & Futures Commission.

Starling is also guided by a Scientific & Academic Advisory Board that includes John Seely Brown (former director of the Xerox PARC Research Lab), Nicholas Christakis (director of Yale’s Human Nature Lab), Karen Cook (director of Stanford’s Institute for Research in the Social Sciences), and Thomas Malone (director of MIT’s Center for Collective Intelligence).

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Further On Up the Road

Starling Team

If we fail to address the financial sector’s Achilles’ Heel – misconduct risk – in the course of what Mohamed El-Erian has termed a race between economics and Covid-19, a spate of scandals will almost inevitably follow our current heroic efforts. This will rob the financial industry of what little public trust remains to it, likely deepening an already worryingly broad discontent with capitalism – and perhaps even with democracy itself.

Policymakers, regulators, supervisors, boards and bank leadership and risk officers should consider this closely if they wish to avoid a future crisis, as pandemic-era bombs explode further on up the road.

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