Actionable Steps for Banks to Take Advantage of Risks & Opportunities

ZipTie builds and encourages teams for mid-sized and community banks across the country to advance in the most elegant path toward their greater purpose, which includes having a self-sustaining culture of continuous improvement and innovation, capturing lessons learned, and creating actionable steps to be better prepared to flourish in the future.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”  Teddy Roosevelt, speech entitled “Citizenship in a Republic” delivered in Paris, France, April 23, 1910

Learn From Past Experiences

Just a few years after T.R. delivered his now-famous speech in Paris, Germany declared war on Russia, France, and Belgium. “World War I was known as the “war to end all wars” because of the great slaughter [about seventeen million deaths] and destruction it caused.”

“World War II resulted in 4 to 5 times as many deaths [about 75 million] and with the invention and dropping of the atomic bomb on Hiroshima, it forever changed the methods in which future wars would be fought.”

A report from the Costs of War project at Brown University revealed that “20 years of post-9/11 wars have cost the U.S. an estimated $8 trillion and have killed more than 900,000 people.” The 9/11 attacks may have again changed the methods in which future wars would be fought.

“On Dec. 26, 2004, the world’s most powerful earthquake in more than 40 years struck deep under the Indian Ocean off the west coast of Sumatra. According to the U.S. Geological Survey, the underwater quake hit with the power of 23,000 Hiroshima-type atomic bombs – creating the deadliest and most destructive tsunami in recorded history, claiming the lives of over 230,000 people in 14 different countries and damaging over $14 billion (USD) of property.”

Hurricane Katrina, the costliest tropical cyclone on record, was a large Category 5 Atlantic hurricane that caused over 1,800 deaths and $125 billion in damage in late August 2005, particularly in the city of New Orleans and the surrounding areas.

“The Covid-19 coronavirus pandemic has accounted for over five million deaths worldwide and the economic impact is still being calculated – currently estimated at almost $4 trillion (USD) of lost economic input. It has changed the methods in which the world economy works forever.”

“Financial crime, a threat which continues to grow with unsustainable costs, results in an estimated annual cost of money laundering and associated crimes ranges from $1.4 trillion to $3.5 trillion (USD).”  This amount excludes the effect of potential cryptocurrency manipulation, which now has an aggregate market cap of more than $2 trillion (USD).

Act in the Present on What’s Been Learned From the Past

Joseph Fiksel, author of Resilient by Design, defines resilience as “the capacity to survive, adapt, and flourish in the face of turbulent change.” The National Academy of Sciences (NAS) defines resilience as “the ability to prepare and plan for, absorb, recover from, and more successfully adapt to adverse events.”  Resilience management transcends traditional risk management to address how to consider the complexities of large integrated systems and the uncertainty of future threats to determine how they impact the U.S. financial system.

Historically, it’s been easier to complain about what’s wrong when it happens than to absorb, respond or adapt to lessons we’ve learned from past experiences. Now, with Amberoon Statum KPI’s agile risk analytics platform (with secure cloud technology, AI/ ML, and intelligent automation), banks have a solution that captures data currently managed by the government and other certified sources for every major threat category.

From cyber to rapidly evolving modern technology to economic security (including health security) to natural disasters to terrorism & transnational organized crime to mass civil disobedience to threats of global conflict to potential government & regulatory overreach (sometimes too much federal intervention makes a problem worse), external threats continue to grow at a pace that can only be met by banks with what author and pastor John Mark Comer calls “The Ruthless Elimination of Hurry.”

ZipTie and Amberoon have developed a solution to capture & synthesize data on these external threats and align them with vulnerabilities specific to mid-sized and community bank key performance indicators, to provide consistent, reliable insight to measure their impact, following our Threat-Vulnerability Analysis:

Establish Discipline to Improve Future Resilience

People, process, and technology continuously working together for a common purpose to improve and innovate is what built democracy in America; it’s what built the financial services industry; it’s what Teddy Roosevelt was preaching when he delivered that inspirational and impassioned message after his presidency. But anyone who has stayed up late night studying A.P. U.S. History with their high-school student knows world leaders have not embraced it.

Paraphrasing Comer’s book (which I highly recommend), to achieve what we desire we need to:

  1. Slow down.
  2. Breathe.
  3. Take what we’ve learned from the past and focus it on taking our next step Right Now.

But the intensity, frequency, and randomness of these threats keep increasing and can be alarming – think of “The Matrix” scene when Neo and Mr. Smith are dodging rapid-fire bullets. How do we dodge all of those bullets if we slow down?

  1. The First Step is Important. Slow down, don’t move too fast – Have the discipline to triage your problems (“all those bullets”). Have Faith! Moving too fast may bring even more “kill-shots.”
  2. Breathe – Before you take your next step, understand not all those bullets are “kill-shots.” Pivot (or prioritize) the kill-shots vs. the wounding shots vs. the misses. Focus on the highest risk first but don’t forget Mr. Smith is getting better each time he shoots. He may hit his mark next time.
  3. Take your next step with purpose but take it Now – “the Present is the point at which time touches eternity” (C.S. Lewis, The Screwtape Letters) – banks (like people) that spend too much time dwelling on the Past, or too much time focused on the Future, will fail to take advantage of the opportunities right in front of them.

Everyone fails sometimes, don’t dwell on it “… when you fail, begin again. This time: slowly.”

Let’s Get Started

ZipTie Advisors provides Strategic CFO (including Complex Accounting & Reporting), CRO (including ERM & TRM), and business and operational process services and solutions to banks and credit unions throughout the U.S. focused on optimizing shared value through people, process, and technology. Along with our deep financial services experience and partnership ecosystem, we will collaborate with your bank to tailor a plan, bring the right Team and Experience to assist you and work relentlessly to ensure your success. Let us introduce you to our process at https://www.ziptieadvisors.com

Amberoon’s deep bench strength in forensic inquiry, artificial-intelligence-driven predictive modeling, and risk-based scenario analysis – integrated with continuous human interaction to monitor and update emerging data insights responsibly, allows us to offer the safest modern technology available through their agile development approach. Find out more about the functionality and adaptability of Statum KPI at https://www.amberoon.com.

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